Now South Africa's largest vehicle reseller, they've completed their unbundling process and its owners are from Transaction Capital and they hope that they will unlock value for their shareholders now with the new JSC listing. Joining me is the CFO, Chris Rein. Chris, thank you so much. It's been a journey for you to get here and I hope that your team is excited, but give me a view of what exactly you believe is in store for those who wish to invest directly now into WeBuyCars. Yes, good afternoon Zahele and good afternoon to your viewers. Yesterday was indeed a very exciting day for WeBuyCars, a business that started in 2001 and a very exciting history and really a great South African growth story and yes indeed a very exciting day. The team at WeBuyCars have been working very hard with professional advisors and auditors since about October last year and yesterday was the culmination of the announcement of the unbundling and also the publication of our pre-listing statement. So indeed a very exciting day for WeBuyCars. And what does that mean for WeBuyCars? Does this unlock your ability to think about your strategy and even future growth within South Africa or even the continent? So WeBuyCars has been on a growth journey since 2001. I specifically joined the team in 2017 and we've seen an amazing sort of growth trajectory with 349 employees in 2017 and right now sitting on about 2800 employees and we just plan to continue on the growth journey and doing what we do well and we will continue on that journey. But the listing is an exciting project for us. It's actually a project that we've looked at once before some years ago in our history but the team is certainly very excited and ready for the future sort of planned growth. And for investors again we look at where do you see the growth for WeBuyCars? It's tough economic times, consumers are extremely stressed. How is WeBuyCars aiming to grow and which segments are offering hope for your investors and therefore your return on investment? So we currently have a footprint in South Africa of 15 what we call super supermarkets and we have 74 buying pods but we plan to continue on that growth journey and we will certainly be adding some more real estate to our property portfolio as well as some external leases. So we will definitely be growing that footprint. We've also worked very hard over the years to develop a loyal customer base and we plan to and we make the process of buying and selling a car extremely easy for consumers and we believe by doing what we do well we'll continue with the growth trajectory for WeBuyCars. And do you see your customer changing whether it be in a demographic or age or you know who's your consumer that offers the biggest return as we go forward? Is it your middle middle class? Is it the lower income group of buying cars? Who are we buying into? So we like to serve the entire vehicle park as we call it so we'll buy any car and we'll then sell those cars into the South African consumer market. We have three real sales channels so the first channel we sell into is we sell about between 20 and 25 percent of the vehicles we buy we sell back to dealers in South Africa. We also then do normal finance transactions where we finance motor cars with the big five banks in South Africa and that accounts for between 20 and 22 percent of our total volume and then the middle category is what we call cash retail and we sell those cars on cash terms to consumers in South Africa. At the moment our average selling price is running at about 160,000 rand including VAT. So as I say we serve the whole market but on average the price point that we sell it is about 160,000 rand including VAT. So you've got quite a spread and it's a consistent strategy but let us in on your growth strategy. You know one of the two or three things that you are intending to do besides further investment in retail. What else are you utilizing to attract investors into We Buy Cars as it lists? So we're currently selling sort of 14,000 buying and selling about 14,000 motor cars a month. Our plan is over the next four to five years to grow that volume to 23,000 motor cars a month. We plan to do that as already mentioned by growing the footprint but also to increase what we call the velocity. So we plan to increase the inventory turns and by keeping doing what we're doing and working with the technology set that we have we believe that we can achieve on our ambitious growth plans. South Africa is really big enough to have another one of these big sales grounds like you have at the Dome. Where is that? Where would you see this growth taking place? So we currently probably have approximately a 12% market share on used vehicles and our plan is to grow that to 23% in four to five years and we think that's achievable. Well I think we need to be here for that. I love the simplicity of the story from 14,000 to a 23,000 footprint two to three years. What are the challenges however you foresee in this huge growth strategy for We Buy Cars? So the motor industry is all about consumer confidence and as you know there is some volatility in some of the macroeconomic factors at the moment. So we're all very aware of high interest rates that we see at the moment. Fuel prices also play a role but it's all really about consumer confidence and we're hoping later on the year to see some of the interest rates starting to decline and that will certainly be some wind in our sails but we believe we can still achieve our growth plans even if the economy stays the way it is. And what's the formula for that? What's the formula for that confidence? Is it operational efficiency? Is it simplicity of business? Is it technology? If it's technology you need to let us in. It's definitely technology so we're very proud to have a technology stack that consists of one and only one RT system and we'll protect that aggressively in future years. We believe that we've got very close to perfecting the art of buying motorcars and we're getting better and better all the time and selling motorcars. So the technology is key. We have an employee workforce of 2,800 and all of those are employees who buy into the WeBuyCars culture and we believe that culture is extremely important and is also a key growth enabler. And culture is not an easy one to manage but for us and today we're having a lot of conversations around social impact. Your perspective on what WeBuyCars is into the broader economic standing of South Africa, what is it that you believe you are adding back as value to the country? So WeBuyCars is definitely an enabler in terms of mobility. We've always analysed what we're selling every year and for the latest financial year we worked out that we're selling about 7% of our motorcars are one and two-year-olds, 22% of our motorcars are three to six-year-olds and 73%, the remaining 73% of the motorcars that we sell are six years and plus. And we believe that that's a part of the market that's really unserved and a 80,000 rent motorcar is an incredible solution to a family of four who are able to then sort of have a mobility solution for the entire family. I'm asking really tough questions to a CFO but thank you so much for answering them. I made the mistake of having five children instead of three and instead of two so we're a family of five and it really does get difficult. Chris, thank you so much for your time today. We wish you all the best and may you blow the horns of the JSC loud enough for us to hear it a few streets away right here in Sandton. Thank you so much for your time. That was Chris Raine, he's the CFO of WeBuyCars.

WeBuyCars, one of South Africa's largest vehicle resellers, will be listed on the 11 of April, completing an unbundling process its owners Transaction Capital hope, will unlock value for its shareholders. WeBuyCars CFO, Chris Rein joins CNBC Africa for more. 

Transaction Capital to unbundle WeBuyCars

WeBuyCars, one of South Africa's largest vehicle resellers, will be listed on the 11 of April, completing an unbundling process its owners Transaction Capital hope, will unlock value for its shareholders.

Transaction Capital to unbundle WeBuyCars

News Tips

Advertise With Us

Transaction Capital to unbundle WeBuyCars

SIGN UP FOR OUR NEWSLETTER

DAILY UPDATE

News Tips

Advertise With Us

Newsletters