WeBuyCars sold more than 40,000 cars in a space of three months ending September, cementing its place as the dominant force in the used-car market as cash-strapped consumers buy down.
The surge in sales saw the group on Monday report a 16.5% increase in revenue to R23.3bn in the year to end-September, with the last three months of the period seeing the group sell more than 14,000 cars a month.
“This growth trajectory can be attributed to the continuous efforts in enhancing and investing in the group’s innovative digital business platform. This proprietary platform empowers the group to optimise operations through pricing strategies. Moreover, it facilitates large-scale experimentation, enabling exploration of various business processes and pricing models dynamically,” the company said.
“As the business continues to scale, so does the volume of data gathered, providing invaluable insights that fuel ongoing efficiency enhancements and the streamlining of the vehicle buying and selling processes.”
The group, whose share price has doubled since being unbundled from Transaction Capital earlier this year, said its best performing brands were the usual suspects: Toyota, Ford and Volkswagen.
Chinese brands were also making inroads. Standard Bank in September said Chinese car brands were defying market challenges in SA, having registered sales growth consistently since 2022 with Haval emerging as the most popular brand, followed by Chery and BAIC.
The numbers of cars sold by WeBuyCars dwarf those of new vehicle sales, which has had an underwhelming year, save for October when there was an uptick in sales.
“The consumer is a little bit more price sensitive and due to the depreciation in value of a used vehicle it is a more affordable option for the majority of consumers,” the company said.
WeBuyCars reported a 23.4% rise in full-year core headline earnings as the group experienced higher volumes and increased average selling prices.
It uses core headline earnings — adjusted for non-recurring or non-cash items that may distort the financial results — to measure and benchmark the underlying performance of the business. Core headline earnings rose to R815.4m from R661.1m a year ago, or 217.4c per share, which was 9.9% higher than a year ago.
Core headline earnings per share (HEPS) were affected by the February and March new share issues — about 83.2-million shares — implemented as part of the pre-unbundling steps and the prelisting capital raising initiatives. A cash dividend of 25c per share was declared.
The group said it was well positioned to benefit from lower interest rates, higher levels of consumer confidence, an improvement in new vehicle sales volumes and cost efficiencies driven by economies of scale. It made progress in its stated ambition to grow monthly volumes to 23,000 and double its market share by 2028.
This included the opening of its East London and Rustenburg supermarkets. In September the group signed a lease agreement to secure a bigger trading location in Pietermaritzburg. The planning for the Lansdowne supermarket in Cape Town is progressing well and the development is scheduled for completion in October 2025.
The group entered into a property sale agreement to buy land in Montana, Pretoria, which will be developed during 2025 to accommodate about 1,000 vehicles for sale. In October, it acquired an existing motor dealership in Vereeniging and it plans to begin trading from this facility in May 2025.
The PIC on Friday increased its stake in the group to 10%.
Update: November 18 2024
This story has been updated with more information.
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