Faan van der Walt says the used-car seller has a winning formula and can withstand future economic challenges
“We have dealt with headwinds, Covid-19, high interest rates and we have grown. Nothing will stop our growth now that we are going to play in the listed space,” said Faan van der Walt, WeBuyCars chief executive.
The Mail & Guardian spoke to Van der Walt and WeBuyCars chief financial officer Chris Rein ahead of the used-car seller’s JSE listing on 11 April.
Van der Walt said it can be disappointing to see the company’s monthly and yearly results knocked by headwinds to the second-hand car market. But the chief executive’s spirit won’t be broken by these challenges.
The Automobile Business Council noted last month: “The persisting economic strain remains a real concern for household income and the weak new vehicle market reflects that middle-income households are restricting big financial commitments for items such as vehicles at present.”
Van der Walt echoed this view. “The consumer is under pressure and then there is also the uncertainty going into elections in the near future.”
“During such periods, consumers usually freeze and they are inactive and they subsequently pause any decision making.”
WeBuyCars sells more than 14 000 cars a month and, when asked if there was space to scale the business, Van der Walt confidently said: “There is no reason why we cannot continue to grow.”
Reflecting on the upcoming listing — as well as questions about WeBuyCars’ ability to grow its market share — Van der Walt said he was reminded of the 2019 Naspers deal, which was ultimately blocked by the Competition Commission. At the time, the JSE-listed technology giant quizzed WeBuyCars on its growth plans.
“At that point we were selling 7 000 cars a month and we already had branches in the major metros around the country … Right now we’re trading north of 14 000 vehicles a month, which means we have more than doubled in that period,” Van der Walt said.
Shortly after the Naspers deal fell through, Transaction Capital bought 49.9% of the ordinary shares in WeBuyCars and paid R1.84 billion.
“If we look at our growth trajectory and the means that we have and the size of the market, there’s plenty of room for us to grow,” Van der Walt said.
He added that WeBuyCars is positioned for growth because it has carved a niche in the market. The company cannot be outpriced and its operating costs are low, according to Van der Walt.
“It’s an exciting period for us.”
When he and his brother Dirk started the business in 2001, they never looked too far ahead — but WeBuyCars has become a household name. Being listed is a big milestone, marking the business’s growth and success, he said.
After the listing, Transaction Capital will no longer own any of the company’s shares. The WeBuyCars shares held by Transaction Capital will be distributed to shareholders of the parent company.
The founders, Faan and Dirk, will retain 10% of the WeBuyCars shareholding, down from 25% prior to the listing.
Transaction Capital aims to raise between R900 million and R1.25 billion from the unbundling.
According to Rein, the funds that WeBuyCars raises through the listing will be used to settle two sources: the balance of the founders’ reduced shareholding and Transaction Capital’s debt.
In its integrated report published in September 2023, Transaction Capital said at holding company level, management is working towards reducing the gross debt of R2.2 billion.
“There won’t be a dramatic difference to WeBuyCars,” Van der Walt said.
“We have a recipe that works really well. We will continue doing exactly what we are doing.”
WeBuyCars will list at R18.75 a share.