WeBuyCars is positioning itself to capitalise on the rapid rise of Chinese car brands in SA.
While German brands remain strong and established, the group said Chinese entrants were gaining ground in the used car market, buoyed by competitive pricing, improving quality and stronger post-sale support.
Group chief strategy officer Willem Kloppe said demand for second-hand versions of the Chinese brands was rising, with names such as Haval and Chery leading the charge.
These brands have made a big effort to establish solid post-sales service networks, ensuring the availability of parts and servicing options, which builds trust with consumers, Kloppe said.
Post-sales support is seen as critical to long-term success, and WeBuyCars believes that the Chinese brands who get this right will emerge as clear winners.
While WeBuyCars did not pick or promote any specific carmaker, they responded directly to consumer demand and market trends, he said.
The group had noticed a sharp increase in the number of Chinese vehicles being bought and sold through their supermarkets, and these cars were delivering strong returns.
Vehicles from brands such as Haval and Chery were not only being sold in higher volumes but were also moving off the floor faster than expected, indicating high demand and consumer confidence, he said.
As some new Chinese entrants such as BYD, BAIC and JAC have only been in the market for a few years, Kloppe said it was still early days for them in the second-hand space. As most consumers hold onto new cars for at least five years, these brands have not yet cycled through to the used car market in meaningful volumes.
However, early indications suggested that the build quality of many of these vehicles was better than expected. Kloppe drew comparisons to the rise of Korean brands such as Hyundai and Kia, which overcame similar scepticism on entering the market.
He recalled that many buyers were concerned that they would be unable to secure car parts and post-sales support but the two brands, now widely accepted, continued to thrive.
WeBuyCars sees the growing popularity of Chinese vehicles as a long-term trend and they are confident that some of the brands will not only survive but thrive.
“We also expect that these brands will proactively manage that well and will be able to illustrate that these vehicles can last and compete with not just the German, but all new vehicle manufacturers worldwide,” Kloppe said.
The group on Monday reported higher earnings at the halfway stage of its financial year thanks to its expansion efforts, which resulted in higher volumes, increased average unit selling prices and improved margins and cost efficiencies.
Core headline earnings for the six months ended March rose 26.4% to R508.2m, it said in a statement.
The group declared an interim dividend of 30c per share.
Revenue increased 15.2% to a record R13.1bn. The rate at which vehicles were bought increased 12.9% to 92,339, while vehicles sold rose 13.5% to 91,392. It achieved a monthly record of 16,294 units sold in November last year.
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