WeBuyCars (WBC) bought 142,337 vehicles in the financial year (FY) ending September 2023, a year-on-year increase of 9%, and it sold 141,851 vehicles during the same time, a jump of 13%.
During this period, direct-to-consumer online sales grew from 6.1% in 2022 to 7% in 2022, whereas business-to-business sales fell from 21.1% to 15.4% of the overall sales mix.
At the end of FY2023, the pre-owned car platform’s earnings totalled R658 million, down 14% in comparison to R762 million in 2022.
While still a loss, it is not as substantial as the 20% drop in earnings that the company predicted it would achieve for the full financial year thanks to a recovery in momentum in the second half of FY2023.
A change in market conditions
WBC owner Transaction Capital attributes the overall lower revenues in FY2023 to an “unusually robust” second-hand vehicle environment in 2022 that was supported by constrained supply and vehicle price inflation in the new-car market, as well as an increase in consumer confidence as Covid-19 restrictions were lifted.
These economic conditions have reversed over the past year, however, as record interest rates, fuel prices, and load-shedding dampened consumer confidence and the supply of new vehicles recovered to pre-pandemic levels.
“WeBuyCars’ agile business model and quick stock turn enabled it to respond quickly to these market changes in H1 2023, reducing trade in high-end vehicles to resume a greater focus on lower-priced second-hand vehicles,” said Transaction Capital in its latest financial statements.
“Although margins were initially negatively impacted by this response, they have since normalised, and the adjustment in stock and trading mix towards the lower end of the market aligns with current consumer demand.”
WBC has also increased its total parking bays in FY2023 from 8,580 to 10,339 across the national franchise network, and the number of vehicle-buying pods from 56 to 69. These pods enable the retailer to expand its footprint across the country in a capital-light manner and be more accessible to potential customers.
This robust business model has allowed WBC to keep gaining market share in 2023 despite tougher trading conditions, said Transaction Capital.
Going forward, the company is confident that the structural elements underlining the medium and long-term outlook for the second-hand vehicle market in South Africa remain positive and that WBC will continue growing in this sector.
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