WeBuyCars feeling the pain of cheap Chinese cars

WeBuyCars’ earnings and profits took a hit from a challenging trading environment over the past six months, particularly amid growth in South Africa’s new-vehicle market.

The second-hand car giant explained in its interim 2026 results that the new-vehicle market was aided by the rapid rise of competitively priced Asian brands.

WeBuyCars released its results for the six months through March 2026 on Monday, 18 May, which revealed a mixed performance.

While revenue grew by 7.8% to R14.2 billion, the company’s operating profit fell by 4% to R701.1 million. 

Revenue growth was aided by the sale of 93,519 vehicles, up 2.3% from 2025, while the company bought 95,328 vehicles over the six-month period, up 3.2%.

The group’s basic earnings per share declined by 1.6% to 119.5 cents, and headline earnings per share were down 1.7% to 119.7 cents.

WeBuyCars also saw a significant decline in its net cash generation from operating activities, down 77% to R65.4 million.

From an operational standpoint, WeBuyCars expanded significantly, growing its footprint to 20 supermarkets and 109 buying pods, up from 17 and 93, respectively.

The company attributed its financial struggles to a continued challenging and deflationary trading environment, saying it stands in stark contrast to the buoyant market experienced in 2025.

The trading environment in the first six months of WeBuyCars’ 2026 financial year was impacted by the growth in the new vehicle market, which was up 15.7% in the 2025 calendar year.

The company explained that the new vehicle market was aided by the aggressive rise of competitively priced Asian brands.

Over the past few years, affordable cars from Chinese and Indian manufacturers have boomed in popularity in South Africa.

“This has significantly influenced consumer behaviour and heightened competition, with these brands capturing notable new vehicle market share through attractive pricing and compelling finance offerings,” WeBuyCars said.

“The current strength of the new vehicle market in South Africa continues to place pressure on margins across the used vehicle sector.” 

Margin pressures

In contrast to the new-vehicle market, WeBuyCars explained that used-vehicle prices deflated over the six-month period.

“Traditional manufacturers, in an attempt to regain lost ground, responded in kind, further intensifying price competition and compressing the value differential that has historically made used vehicles a more attractive choice for many South African consumers,” it said.

In response to these pressures, WeBuyCars adjusted its selling prices downward, particularly for vehicles competing with Asian brands, placing pressure on the group’s margins.

“The core headline earnings were also impacted by the opening of three new supermarkets, following a drive to invest ahead of the curve to secure expansion in key strategic areas,” WeBuyCars said.

However, the company said the popularity of Asian brands may be a boon for WeBuyCars in the medium-term, as these vehicles enter the used-car market.

In addition, it reassured shareholders that the current challenging trading conditions have not impacted the group’s medium- to long-term growth aspirations.

By its 2028 financial year, WeBuyCars aims to be buying and selling 23,000 vehicles a month.

The group is on track to reach this goal, having opened three new supermarkets over the six-month reporting period, expanding its national parking bay footprint by 23.9% or 2,980 parking bays.

WeBuyCars now has 15,614 parking bays across its operations.

The company also reported that its investment in its consumer app and website is paying off, with the website now averaging 8 million monthly visits from 2.4 million unique visitors.

Despite its financial struggles over the six-month period, WeBuyCars upped its interim dividend by 10% for the first half of its 2026 financial year, to 33 cents per share.