Tag Archives: stratton

Take 2: Who has the No 1 Auto Classified Website in the World?


carsales is the number 1 auto classified website in the world.

Ok, there, that’s my answer to the common question of “where is carsales?” after my last post Who has the No 1 Auto Classified Website in the World.

How do I make this assertion now? (note: no I wasn’t told or advised to and I don’t feel obliged to!)

The best way I can answer this question is to quote the last paragraph of my last post:

At the end of the day, all of these websites are businesses and we all know that, as my esteemed former colleague used to remind me, “you can’t bank wank” – in other words, making money has to be the overriding measurement.

There you go, carsales is the number 1 auto classified website in the world because of the financials it delivers compared to the size of the opportunity, ie Australia’s comparative size in population & cars sold compared to the UK, US, China, etc.


A close second would have to be Autotrader.co.uk (although it is number 1 in terms of market cap) which has done an incredible job in the UK with others such as Autotrader.com (probably number 1 in terms of revenue), cars.com and Autohome.com (number 1 in terms of traffic) probably there abouts, all being great online businesses.

I could write another dozen posts with a different website in each post putting up a claim to be the number 1

Three areas where carsales is very strong compared to the before mentioned businesses are in private sellers, display advertising and adjacency businesses. These three business units help to make carsales the incredible business it is today.

The private seller business in carsales is an absolute standout compared to the majority of other online auto vertical businesses around the world. This is an area where large general classified business (horizontals) have really taken the space but carsales has managed to get and maintain a strong holding with the Australian consumer because “it works”.

The display advertising business of carsales has been a unique success story that has been able to deliver quality, premium audiences to automotive focused businesses, particularly OEM’s where a proliferation of data from consumers going right through their car finding journey has made it the most qualified advertising medium available.

The adjacency businesses are the newest of the three with the sale of tyres online through Tyresales.com.au, vehicle finance through Stratton Finance and car inspections through Redbook Inspect the standouts. Each of these businesses are partnerships carsales has entered into that leverage the carsales audience while still keeping an entrepreneurial style to ensure they grow as standalone businesses in their own right while delivering value to carsales through smart integrations.

Let’s not forget too that if carsales is doing well then it’s dealer clients must be doing well as it’s business model for the biggest part of its business is directly tied to what it delivers its dealers – leads which leads (pardon the pun) to sales.

The truth is, I could write another dozen posts with a different website in each post putting up a claim to be the number 1 auto classified website in the world.

I won’t do that but it does show one of the reasons to why this is a fascinating space to be involved in.


What Does Brazil Know That We Don’t?


20160504_WebmotorsFinanceForm

carsales acquisition of Stratton Finance last year caught a few people by surprise as they thought it was outside of our core offering. What makes it more interesting is that in Brazil, the three leading automotive vertical websites are owned by banks. More on that shortly.

An automotive portal’s core value proposition is as a channel between buyer and seller. For dealers and private sellers it is a buying channel where buyers can come to the one place, find the car of their dreams (or needs) and deliver leads to the seller, thus providing them with the opportunity to sell their car.

As around 50% of used car sales are financed, it makes sense that at the time of enquiring about a car on carsales, the buyer can/will/does also enquire on the best finance to purchase the car.
20160504_carsalesStrattonForm
Stratton had been a carsales display advertising client for over 10 years as they looked to capture these finance enquiries so it made sense for carsales and Stratton to get closer and maximise the finance lead generation opportunities.

Just to be clear here, the Stratton Finance brand and integration is ONLY placed against private seller cars on carsales, NEVER on dealer’s cars. In fact, carsales has NEVER placed a finance advertisement on a dealer car as dealer’s offer their own finance to their buyers and we do not want to diminish this opportunity for them.
20160504_Eauto
The finance model and automotive portals is nothing new in Australia. In 2000 ANZ Bank’s Esanda Auto Finance started an automotive portal called eauto.com.au in an attempt to be a finance lead channel. In the same year, St George Bank formed a strategic partnership with Autobytel.com to launch Autobytel.com.au in Australia and try to replicate what was a successful model in the US. By 2002 both were gone with millions of dollars lost.

carsales had also tried its hand of monetising finance leads long before the Stratton investment with the creation of a business unit called Click For Finance 7-8 years ago. This effort didn’t last long either.
20160504_Webmotors2007

Webmotors.com.br, 2007, shortly before the Santander acquisition

Back to Brazil.
We have looked at automotive portals around the world and I am yet to find any that are owned by banks, except in Brazil, where the three leading players are owned by banks:

1. Webmotors has Banco Santander as the controlling shareholder (with 70% and carsales 30%) after it acquired ABN Amro Bank in 2007 (ABN Amro had acquired Webmotors in 2002);

2. iCarros is owned by Itau Bank; and

3. Meucarronova is owned by BV Financeira

Do they know something others around the world don’t? No, I think that since Webmotors came to Santander through a bank acquisition and they kept hold of it, the other two banks took opportunities to follow suit.

As a side here, the founder of Webmotors also founded iCarros after he sold Webmotors to ABN Amro Bank so he followed a successful path for him in selling iCarros to Itau. “Only in Brazil” as my friend Fernanda says to me, seemingly all the time.

I also think the concept of automotive portals being a legitimate finance lead channel is acknowledged everywhere but as Esanda and St George found out, it takes a little more than simply setting up a website. Even in Brazil where the three banks acquired the automotive portals and have owned them for a number of years, they are still yet to maximise the opportunity for finance origination (as opposed to finance leads).

This is where carsales is adding enormous strategic value to Santander as a strategic investor in Webmotors having the experience of trying a finance model internally years ago and now successfully integrating with Stratton.

It is only the start of the journey and should be a great ride!