Selling or buying cars today depends on data rather than just kicking tyres or a cursory look under the bonnet. Collecting that data “is paramount to our success”, says Faan van der Walt, executive director of WeBuyCars, one of the biggest used-cars dealers in SA.
Van der Walt would like more of that data and says dealers should be able to access that without breaching the Protection of Personal Information Act. It helps eliminate fraud too, he says.
WeBuyCars would like to access the salvage database and NaTIS intelligence to verify vehicle documents and avoid buying written-off vehicles. “But the government does not allow that,” he says. The National Traffic Information System provides basic information on vehicles but won’t give away the detailed stuff that Van der Walt would like. He has support from the SA Motor Body Repairers’ Association, whose national director Richard Green says such information should be available in the interests of transparency and ethical standards.
Van der Walt tells the FM that the data helps WeBuyCars to correctly price vehicles and has developed in-house technology to do this. “If someone approaches us to sell a vehicle, we can fairly accurately determine what to pay and quickly. If you make the online application today, the money will be in your bank within less than two hours [after the deal is done].”
WeBuyCars launched its business-to-consumer e-commerce capabilities last year, and 18% of its total online sales were on this platform during its 2022 financial year, up from 5% in 2021. Overall, the company sold 30% of its vehicles via e-commerce during its 2022 year, down from 33% in 2021.
It bought about 11,000 vehicles in March, and acquired 60,046 during its 2022 financial year, a 38% increase from 2021, and it sold 58,520 in its 2022 financial year, up 41% from 2021. Because of this performance, WeBuyCars increased its headline earnings during the year ended March 2022 by 58% to R406m.
The start to the new financial year looks good too. In April, it bought 10,247 vehicles for about R1.5bn and sold 9,868 for about the same price.
Joburg’s dome, once an entertainment venue, is now the country’s biggest used-car showroom
Van der Walt, 47, is also the antithesis of the used-car salesman stereotype. No foot-on-the-bumper big talk, nor loud checked jacket and tie. Instead, he’s casually conservative with an open-neck shirt and matching trousers. It figures: he was once a schoolteacher.
He also stays close to his product. The FM interview was conducted in the company’s Centurion offices, part of a warehouse full of second-hand cars. It’s the second-largest of the 13 warehouses/showrooms WeBuyCars uses, of which the Dome in Joburg, once a huge entertainment venue, is the biggest.
WeBuyCars opened in March 2001 and has a staff of close to 2,500. Van der Walt began the business with his brother Dirk, a “big-picture thinker”. “[Dirk] spends a lot of time thinking and reading books. I’m a focused person and task-driven. One of our business values is that tomorrow is not another day. So we always have a sense of urgency,” he says.
WeBuyCars is expanding beyond SA by opening in Morocco. However, the market there “is extremely fragmented, and there is a low level of trust between consumers and car dealers”. When Van der Walt visited Morocco, the largest car dealer he found had fewer than 40 vehicles in its showroom. He says there is an opportunity for WeBuyCars to consolidate the market in that country and benefit from economies of scale.
The company also turns over its stock quickly, he says. “The industry does well when it turns stock in 60 days; we do it in 20 days.” It also services the “whole car park” rather than focusing on a particular vintage, brand or age.
Selecting and buying used cars is a tricky business, and between 4% and 6% of WeBuyCars’ vehicles are sold at or below cost. “That is no different from any other dealership,” he says of his company that has closed no branch nor retrenched a single employee during the pandemic.
Last year, used-car dealers did well because chip shortages constrained new vehicle output, which pushed up second-hand car prices. “As a result, WeBuyCars made good profits. However, we are probably in for a rough ride for the rest of this year, with fuel prices escalating, interest rates increasing, and war happening,” he says.
The flooding of the Toyota plant in Durban will also affect new car sales. “I have instructed the [WeBuyCars] IT department to exclude Toyotas from price cuts as I foresee the demand for Toyotas picking up,” he says.
Transaction Capital last year increased its stake in WeBuyCars to 74.9% from 49.9% when it paid R1.6bn for the extra 25%. As a result, the Van der Walt brothers own 25.1% of a company valued at R6.4bn.
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