WeBuyCars sheds light on new car sales speculation

WeBuyCars will stick to its knitting and focus on the growth opportunities offered by the used car market in South Africa, with the company not giving much thought to selling new cars or changing its business model. 

This is despite some media reports indicating that the company is considering selling new cars at its supermarkets across South Africa. 

WeBuyCars’ chief marketing officer, Rikus Blomerus, told Daily Investor that the company will continue to play to its strengths and meet customer demand where it is.

Blomerus explained that the company has not given much thought to selling new cars, as it was merely an idea prompted by questions and offerings from original equipment manufacturers (OEMs). 

A handful of OEMs have reached out to WeBuyCars to inquire about its plans to sell new cars in recent weeks, given the company’s success in moving stock quickly compared to traditional dealerships. 

Speculation that WeBuyCars is considering selling new cars came in response to a question posed at a recent media event for the company. 

Anecdotally, many people tend to sell their cars to WeBuyCars and then purchase a new one elsewhere. The journalist asked if WeBuyCars would consider closing this loop and serving these customers. 

“And we said, no, we have given it little thought, but we have not decided on a business model and how we would do it,” Blomerus told Daily Investor. 

“Maybe it is just advertising new vehicles on behalf of the OEMs, or maybe it is giving them the chance to park a vehicle on our site, but we are really not clear on what we will do and how we will do it.” 

Blomerus explained that the company would continue monitoring the consumers’ needs and trying to meet them as much as possible. 

“We do believe there is a lot of room available for growth in the used sector. That is what we know, and we will keep on playing to our strengths,” he said. 

“OEMs have approached us to ask if there is a possibility for us to work together, and, at the end of the day, it is all about the customer.” 

Blomerus explained that if WeBuyCars can serve customers in a way that does not negatively impact its current business model, it may consider selling new cars. 

“We are not really looking to change our business model, and this would only be an add-on if we do something like this, to enhance our current business model,” he said. 

WeBuyCars going from strength to strength

WeBuyCars has shown impressive growth since listing on the JSE, with the company selling over 15,000 cars a month from its 17 supermarkets and 93 buying pods. 

Just over twenty years ago, the company was buying and selling cars from a single used-car dealership in Pretoria. 

Founded in 2001 by brothers Dirk and Faan van der Walt, WeBuyCars has grown to become the dominant player in South Africa’s used-car market. 

The first ‘supermarket’ soon opened in Pretoria, which could hold 100 vehicles. WeBuyCars’ rapid growth resulted in it expanding to 700 vehicles in less than a year. 

Dirk and Faan did all the work themselves for the first ten years. However, after launching a website, the brothers soon realised they would need to hire people to buy and sell cars across South Africa.

In 2014, they began appointing their first buyers in all major cities in South Africa, and followed this expansion with the launch of additional supermarkets in Cape Town, Durban, and Centurion.

Faan and Dirk did not draw salaries from the company during this phase, ensuring as much of the profits as possible were reinvested in the business.

WeBuyCars has, in just over 20 years, grown from a company with two employees buying and selling a handful of cars a month to a 2,800-employee behemoth that bought and sold over 15,000 cars per month for the first half of the current financial year.

This has translated into a strong financial performance, with revenue growing 15.2% to R13.1 billion for the six months ended 31 March. 

Core headline earnings, the company’s preferred financial metric, also showed strong growth, rising by 26.4% to R508.2 million. 

The company has an ambitious target of buying and selling 23,000 vehicles per month by the 2028 financial year, with its expansion plans being on track. 

Key to this expansion is the continued investment in the company’s physical infrastructure, such as vehicle supermarkets and buying pods, as well as in its technology platform. 

In the six-month period to 31 March, WeBuyCars added 10 new buying pods, bringing its national footprint to 93. 

It also relocated its Pietermaritzburg supermarket to a larger site and expanded capacity at its Polokwane, Joburg South, Riverhorse Valley, and Gqeberha facilities. 

The company also opened its first vehicle supermarket in the North-West province in Rustenburg on 1 October, with capacity for 300 vehicles. 

WeBuyCars plans to add two new supermarkets to its portfolio before the end of the year, with a new facility in Vereeniging and Lansdowne in the Western Cape. 

It will also open a new supermarket in Pretoria North in December 2025. Both the facilities in Cape Town and Pretoria will have the capacity to accommodate 1,300 vehicles each.