WeBuyCars moves focus to trucks and vans

WeBuyCars will ramp up the commercial vehicles segment, which includes trucks and vans, placing a safe bet on demand from the courier market and other goods delivery services. 

CEO Faan van der Walt said truck sales in South Africa have been fairly buoyant in recent years. “With our rail system not being reliable, people are very reliant on trucks to transport goods. The growth of online shopping also requires delivery vehicles to service customers.”

WeBuyCars, which buys and sells pre-owned vehicles and bikes, started adding trucks and delivery vans to its portfolio in the past 18 months. “We never really took that seriously because of space constraints. We couldn’t accommodate them in our warehouses, but with the availability of adjacent space at the Dome (in Northgate), we started trading in trucks fairly successfully,” said Van der Walt.

“There are definitely ebbs and flows in that space, where certain types are in high demand at certain periods while others might have oversupply. We have seen that with coal trucks where there’s a big oversupply and it becomes difficult to sell. But we make sure what we buy is what we can sell quickly.”

WeBuyCars has secured land and other properties that will enable the company to accommodate more trucks. It expanded its national footprint by opening a new vehicle supermarket in East London (in the Eastern Cape) in June, with a capacity for 300 vehicles, and in Rustenburg (North West) in October, with a capacity for 300 vehicles.

The group also signed key property deals to develop new facilities in Pretoria and Cape Town in 2025, as well as to relocate the Pietermaritzburg supermarket to new, improved premises. It is looking at the Free State, where Van der Walt said the company is underrepresented from a selling perspective. “Over time, we will certainly be able to sell cars physically in all provinces,” he said.

During the year to September, buying and selling volumes at 167,741 and 165,185 units were up 17.8% and 16.4%, respectively. Sold volumes reached an all-time monthly record for WeBuyCars of 14,594 units in July. The vehicle dealer, which was unbundled from Transaction Capital and listed on the JSE in April, has an ambitious target of pushing monthly volumes of 23,000 by 2028. 

It opened 14 car valuation pods, taking the total to 83 with plans to reach more than 100 next year. Van der Walt said the company had received requests from third parties like fleet owners and banks to use its platforms to sell their vehicles.

Market share of Chinese brands has nearly doubled in the last two years, and we expect that to continue

—  Faan van der Walt, WeBuyCars CEO

“We have seen in the UK and US some companies selling on behalf of third parties. The reason we haven’t done that yet is because we felt it would cannibalise our own market. But with our size and volume now we believe we can start doing this without cannibalising our own market, considering we sell 15,000 vehicles, and if we sell 500 on behalf of third parties it won’t have a negative impact but enables us to expand."

He said the company has “started experimenting with this quite successfully and it is something we will develop over time. Watch the space, it would be something very big.”.

According to Van der Walt, entry-level cars are still popular among cash-strapped consumers, and this trend is expected to continue.

Describing the local vehicle retail industry, he said there had been a steady increase in total pre-owned vehicle registration at a 1.1% compound annual growth rate over the past seven years, while new vehicle registrations recorded a decline of -0.8% during the same period. 

The total number of cars on the road has grown to 11.4-million this year from 8.2-million in 2011, driven by new vehicle sales positively influenced by an influx of new entrants to the market, particularly Chinese brands. Van der Walt said new Chinese brands were making an impact on the market, and for some well-established manufacturers “it’s not good news because they are highly competitive, and quality has significantly improved over the years”. 

He added: “We have embraced this, and we also buy and sell used Chinese vehicles, and so far they are doing well. They are shown to be reliable and tend to keep their value fairly similar to other brands. Market share of Chinese brands has nearly doubled in the last two years, and we expect that to continue.”