BOGOTA Mexican used-car platform Kavak has opened a vehicle reconditioning plant in Colombia, which it hopes will help capture at least 5% of the country's used car market, country manager Luis Eduardo Lopez said on Wednesday.

The 16,900-square-meter (20,200 square yard) plant has a capacity to process 2,500 cars per month and saw an investment of $2.1 million. Kavak launched sales in Colombia in March 2022 after investing $40 million in the country.

Kavak operates in 10 countries in Latin America and has also stepped into the Middle East.

"Each month we've been growing at double digits compared to the previous month ... (Colombia) is one of the main market levels of size in Latin America where around 1.2 million used vehicles are sold each year," Lopez said.

"We have the ambition of getting 5% or more of the country's pre-owned vehicle market, in the case of Colombia with the current figures that means selling more than 5,000 cars per month in the future," he added.

According to the executive, more than 90% of Colombia's used vehicle sales are carried out directly and informally between buyer and seller, without post-sale support.

Kavak currently has a catalog of some 500 vehicles in Colombia.

The platform is valued at about $8.7 billion and is backed by Japan's SoftBank.

In November of last year, Kavak made significant spending cuts and laid off staff amid a weak macroeconomic environment in Latin America.

New investment rounds are not currently being considered, Lopez said, adding that would depend on how quickly the company wants to grow.

"Our future plans do not need new capital, but depending on the speed at which we want to go in our growth, we may or may not be able to go for new rounds," he said.

(Reporting by Oliver Griffin; Editing by Chris Reese)