WE BUY CARS

SUPERIOR TECHNOLOGY AND FRESH CAPITAL INJECTION POSITION WE BUY CARS FOR GROWTH

DEVELOPED over decades into a powerhouse in the pre-owned car market, We Buy Cars recently received a significant capital injection that’s sure to propel this leading vehicle trader into its next growth phase.

Asked what the new capital means for the business, founder of the company, Faan van der Walt, says it will be able to expand its already impressive technology platforms.

“Our We Buy Cars valuation engine and database were developed by seamlessly combining best practice methodology with technological excellence. We are now ready to expand our proprietary technology platforms by investing significantly in enhanced modernization,” says Faan.

Today, We Buy Cars is an impressive business worthy of high praise thanks to its innovative use of technology and its unique methodology, but it all started decades ago as one man’s dream.

Faan van der Walt was buying and selling pre-owned cars when his schoolmates were figuring out if they wanted to grow up to be rugby players or ballerinas. Now, as the founding member and executive director of We Buy Cars, he oversees the acquisition and sale of about 2 000 cars a month. This is the story of how We Buy Cars became a respected innovator and leader.

THE ORIGINS

If the term “serial buyer” exists, Van der Walt would be a perfect example of the species.

It started in high school, when the Bronkhorstspruit schoolboy bought his first car, which he soon sold on again for a small profit. While his schoolmates were spending any cash they had on 50 cm3 motorcycles and pin-up magazines, Van der Walt bought the next fix-me-upper project and so the process continued – buy, fix, sell … buy, polish, sell.

After school, the hobby continued while he qualified as a teacher. “Every Thursday morning at 05h00, I was at the Junkmail head office ready to buy the new issue. I had less than an hour from the time I had the hard copy in my hands to when I had to report for duty in the school staff room. I had to scan for bargains, then phone and ask the seller to keep it for me until I could go and see it after school,”

remembers Van der Walt.

By that stage, he already had a clear-cut modus operandi when he bought cars to sell again.

“I focused on cars that were easy to sell, such as Toyota Corollas, Volkswagen Citi Golfs and Honda Ballades. A keen buying price, with enough meat left on the bone for profit, was obviously important. By that stage, the business comprised up to three cars at any time,” he recalls.

In 1998, Van der Walt and his wife decided to go and work as teachers in the United Kingdom.

“My brother, Dirk, who was busy completing his degree in marketing at the University of Pretoria, became the custodian of the business in SA after I taught him everything I knew,” he says. “Not that I stopped buying and selling cars in the UK. I used a Nissan Micra as a daily driver. That car impressed me no end. When I returned to South Africa with savings of about R300 000, we officially started a used-car business that we named Micra Motors.”

The cash injection had a big impact on the business. Instead of three cars, the Van der Walt brothers could afford to stock a lot more. By 2001, the business was expanded with its webuycars.co.za website. The brothers kept adjusting their approach to a dynamic environment, which included the economic crises of 2003 and 2008, with new approaches, philosophies and strategies.

They adopted the belief that vehicles should be sourced before owners thought of selling it on the open market. They also began advertising their own services aggressively. Not long afterwards, Micra Motors became We Buy Cars. During the following decade, business boomed, but Van der Walt says he realised he was stretching himself to the limit.

“I had to hand over some responsibility to support our growth, efficiency and service levels. To this end, we appointed our first buyer in 2012. It was the best decision we ever made. From there, our business grew to the next level.”

THE BUSINESS TODAY

Which brings us to the 2 000 cars the company nowadays trade in a single month. We Buy Cars has more than 50 buyers throughout the country. There are more than 60 drivers who pick up cars and deliver them all over. The company’s head office is in Pretoria, along with a massive yard where many cars are stored. There is also a big office in Cape Town and the Durban launch is imminent. We Buy Cars employs almost 400 staff members.

“We deal in large quantities of cars and, while our profit margins are not high per vehicle, we can move stock quickly off the showroom floor. We have strong relationships with big used-car retailers, too,” says Van der Walt. Customers can also buy vehicles from We Buy Cars. Financing options are available, as are extended warranties.

TECHNOLOGY DRIVEN

Its large database and excellent technology systems play a major role at We Buy Cars. “Without our massive investment in technology and systems over many years, our smooth buying-and-selling process would be almost impossible,” explains Van der Walt. He says the business is expanding as more customers are turning to the previously owned market.

“We recently sold a 25% stake in the company to Fledge Capital, a large investment firm. Fledge adds its notable expertise in the used-car market to our experience in the same field. In addition, this private company understands the technology landscape well. A large part of its investment will be used to enhance our cutting-edge technology even further.

“For these reasons, we believe the Fledge investment represents a new partnership that will enable We Buy Cars to expand its footprint and business. For instance, it’s assisting us to expand our offering into previously owned-vehicle auctions. We’re also adding additional warehouse space.”

It started with a schoolboy with a passion for cars. Now We Buy Cars is South Africa’s largest second-hand-vehicle retailer.