Let me get this out of the way upfront: I’m long WeBuyCars. I’ve been long since the company was set free from the charred remains of Transaction Capital. If you could travel back to the pre-Covid years and tell investors SA Taxi would sink Transaction Capital and WeBuyCars would completely change the used car game in South Africa, you would’ve been laughed out of the room. And yet, here we are.
The WeBuyCars share price has richly rewarded those who held on to their stocks after it was separately listed. This hasn’t been without volatility, though, with a sharp sell-off at the end of 2025 as the first real test of whether investors would ride this story out. Falling from about R56 to R42 in the space of a month, the share price has subsequently clawed its way back to nearly R53. Those who bought the dip are smiling.
The wobbly was driven by market concerns around earnings pressure in an environment of deep disruption in the automotive sector. As you’ve no doubt noticed, the Chinese onslaught has changed the mix of vehicles on our roads. This creates a different operating context for WeBuyCars — and a new test.
Just this week, the news broke that Nissan is selling its Rosslyn plant to Chery. Sticking with our time travel game, imagine going back in time to when BMW and Mercedes-Benz were among the top-selling cars in South Africa and telling people about the Rosslyn plant change of ownership. Things can change dramatically over a decade, which is exactly why investing in equities carries risk.
It’s a transition period for sure, but not an unmanageable one
The freshly released WeBuyCars integrated annual report notes that total new vehicle sales growth in South Africa was 11.9% in 2025, with the Chinese brands up 74.4%. This remarkable statistic shows just how much market share has been lost (and will still be lost) by non-Chinese brands.
Why does this matter for WeBuyCars, a company that doesn’t sell new vehicles?
Simply, if Chinese brands offer excellent new cars at affordable prices, then the used market for other brands will need to adjust lower until those used vehicles become a compelling alternative again. Though WeBuyCars does a great job of churning its stock quickly, it is still sitting on vast inventory that goes down in value over time. This is the opposite of what we experienced during Covid, when used car prices were heading higher due to a lack of supply.
A further challenge is that it takes time for new vehicles to land in the used network, so WeBuyCars needs to be patient until its stock can reflect the mix of Chinese vehicles on the road. It’s a transition period for sure, but not an unmanageable one. The inherent flexibility in the WeBuyCars model is core to my investment thesis, as it is able to react to changing consumer preferences and adjust its buying strategy (across price and mix) accordingly. The same cannot be said for dealerships that represent original equipment manufacturers and sell new vehicles.
Another major change for WeBuyCars is the decision to move away from Dekra Automotive and create Inspectify, a new, wholly owned subsidiary that will now do the condition reports for cars in WeBuyCars supermarkets. Naturally, this drove an immediate worry in the market around the independence of these reports. WeBuyCars will need to manage this carefully, as the economic benefits of this approach (vertical integration and richer data) will quickly evaporate if the public loses trust in the process. Social media is an unforgiving space.
Vertical integration is a theme WeBuyCars isn’t afraid of, evidenced by the acquisition of 49% in GoBid for almost R377m concluded in December 2025. In its words, this platform is used to sell “accident-damaged, uneconomic-to-repair and other noncore inventory” — that is, all the stuff it can’t sell through the supermarkets. And of course, Inspectify will help assess the optimal route to market for each vehicle it buys.
This chapter of the WeBuyCars story has a target of 23,000 vehicles a month by 2028. In 2025, it averaged just more than 14,900 vehicles a month, so it is looking to grow by more than 54% in the next three years. This will be supported by a growing distribution network (including innovations such as buying pods) and a significant focus on data analytics.
I have no plans to change my long position. Management’s track record in building a household name speaks for itself. Things do change, but top businesses change with them.
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