WeBuyCars, SA’s largest second-hand car retailer, says it had to adjust prices as it faced margin pressure due to structural shifts in the market that have seen consumers pivot to competitively priced and technologically advanced Chinese brands.
“WeBuyCars experienced margin pressure resulting from structural shifts within the SA automotive industry. The continued strength of the new vehicle market, with the rapid rise of competitively priced Chinese brands including GWM, Chery, Omoda, Jaecoo, Jetour, MG, JAC and BAIC, have influenced consumer behaviour and heightened competition,” the company said on Monday.
“These brands have captured notable market share through attractive pricing and compelling new-vehicle offerings,” WeBuyCars said.
“To maintain liquidity and ensure healthy inventory turns, WeBuyCars adjusted selling prices on vehicles competing within these price brackets. This placed short-term pressure on margins during the second half of the year.”
Despite these pressures, the group reported a 13.1% increase in group revenue to R26.4bn in the year ended September. This helped the company report a 15% hike in core headline earnings to R937.6m.
The company, which was listed on the JSE last year, continued to gain market share, reporting a record 16,294 monthly units sold in November 2024.
The group, founded by brothers Faan and Dirk van der Walt in 2021, said monthly sales volumes exceeded 15,000 units in six of the last 12 months — still a long way off the group’s target of buying and selling 23,000 vehicles per month by 2028.
It said despite the margin pressure, the popularity of the Asian car brands would ultimately be of benefit to the group.
“The buoyant new vehicle market and the growing penetration of Asian brands are expected to have a positive long-term impact for WeBuyCars, as these vehicles will enter the used-vehicle market in the future. This will expand the group’s acquisition base and opportunity set.”
Meanwhile, WeBuyCars, valued at about R18bn on the JSE, has created a deputy CEO role, naming its chief digital officer, Wynand Beukes, to the position with effect from January.
“Wynand has been instrumental in shaping the future of WeBuyCars. His appointment as deputy CEO is a natural next step and will strengthen our leadership team as we continue to grow and innovate,” group CEO Faan van der Walt said.
Business Day reported in October that Combined Motor Holdings (CMH) said almost half of its new vehicle sales were Chinese and Indian brands, which had displaced traditional marques for SA consumers.
The surge in Chinese and Indian brands helped CMH’s motor retail and distribution unit report a more than two-fold increase in pre-tax profit in the six months ended in August.
Motus, SA’s leading non-manufacturing automotive group with more than 300 dealerships, conceded last month that it had been slow in introducing Chinese brands that have proven popular with cash-strapped consumers.
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