Tag Archives: webmotors

The Webmotors Journey – Automotive Classifieds & Finance in Brazil


When carsales acquired a strategic stake in Webmotors in 2013, it was more or less a business unit within Banco Santander that was fighting it out with iCarros to be Brazil’s number 1 automotive vertical classifieds website.

Santander invited carsales into Webmotors to help transform its thinking as part of the bank to that of an absolute number 1, legitimate automotive classifieds website that provides an online channel for effective consumer financing.

As we get towards the middle of the 2018 calendar year, the Webmotors business is now run as a nearly totally autonomous business and is the clear number 1 automotive vertical classifieds website in Brazil that is bringing enormous value to the Santander Financiamentos business along with the thousands of car dealers who chose Santander as their finance partner, not to mention the millions of consumers buying and selling their car on the Webmotors platform.

As I talked about in a previous post titled “What Does Brazil Know That We Don’t?“, the three leading automotive vertical classifieds websites in Brazil are owned by banks: Webmotors is owned by Banco Santander (70%); iCarros is owned by Banco Itau; and Meucarronovo is owned by BV Finaceira. This is unique to Brazil (and not the only thing that is unique to Brazil!).

So how do I think carsales has brought increased value to the Santander Financiamentos business? By changing the focus of the business to helping dealers and consumers to sell cars (as opposed to advertising) as the key metric rather than having finance drive the business. Finance can only come about if a car is sold so this thinking isn’t revolutionary but it is a mindset change in Webmotors, in Santander Financiamentos and with the Dealers.

What has been the difference is an unwavering objective of delivering sellers value and helping them to understand, embrace and manage the value that Webmotors is bringing.

This has come about in a number of different forms and there is not one thing that has put Webmotors into the position it is in today.

People – I love visiting Brazil and working with the passionate, smart people at Webmotors. The thirst for learning and achievement is there in each and every visit. We have a great team in place with a fantastic leader. We all know in business how important people are in an organisation. When you can combine passion with smart people across a business of 170 plus people being led by a great leader with a fantastic support team who are smart and engaged, I think you are on the verge of something special.

Product & Technology – Webmotors is an online business that therefore relies on Product & Technology which must be at the forefront of your competitors and peers. One of the first things we had to do in 2013 was create a Product & Technology team by hiring a CIO and to move the technology platform out of Santander. It is hard to believe now that Webmotors did not have its own Technology team some 5 years ago. Development changes would be submitted to the Santander team and prioritised against bank priorities. Being nimble or agile wasn’t in the vocabulary. Today Webmotors Product & Technology is in great shape led by a couple of incredibly talented and passionate people and getting better by the day enabling us to provide enormous value to buyers, sellers and Santander.

Education – This one cannot be underestimated both internally and externally. Internally it is about educating ourselves. Everyone at Webmotors had to understand and believe in our objectives. As I say to the Webmotors team what seems like all the time, “we at carsales are not smarter than you guys, we’ve just lived through this stuff before“. This continued education of Webmotors people of carsales thinking along with their expertise on the local Brazilian market is a formidable partnership.

Santander Financiamentos – One of the great advantages Webmotors enjoys is the support of the Santander Financiamentos business and in particular, the 1,000 odd strong people out in the field visiting and supporting dealers. The association of Webmotors and Santander and the value proposition that exists therein provides for a unique offering to car dealers and in return, both the Webmotors and Santander Financiamentos businesses. As mentioned earlier, the Webmotors focus is on helping sellers sell cars. By having over 1,000 Santander people visiting dealers living the Webmotors focus of helping sellers sell cars, an unparalleled value is created for the dealers and Webmotors.

carsales Strategic Focus – This might be a little self-indulgent but I have no doubt the role that carsales has played in where Webmotors is today. The mindset of everyone at Webmotors had to shift in order to facilitate change, this is why Santander brought carsales into the business and each time I’m there it gives me great pleasure to see that change of mindset in action and continually growing.

What has been particularly pleasing is what has been achieved in the past few years in a Brazilian economy that has been poor at best. Where other Australian companies have seen their interests in Brazil take a hit, Webmotors has bucked the trend to prove that money can be made when value is delivered. Now that the economy appears to be turning a little, we are in great shape to take advantage of it.

While we are pleased with where Webmotors is today, this is still only the start of the journey. Brazil is an exciting, unpredictable place and none more so than in the world of online automotive. Webmotors is primed, ready and willing to take it on.


3 real time carsales metrics


I’ve spent the best part of the past 18 years leveraging the power of data in the online classifieds space.

When you have millions of consumers searching and finding their next car on a country’s number 1 automotive portal like carsales, Encar, Chileautos or Webmotors, data can invariably tell thousands of stories.


Here’s a few powerful “real time” metrics that only a carsales is able to provide with any credibility in their respective country’s car retail market:

Supply and demand
The Days Supply metric is one of my favourites, as it provides real value and something more accurately in the used car market that I don’t think can be replicated. It shows whether supply outstrips demand and vice versa. The beauty of Days Supply is that it can be measured for makes, models, versions, etc and for different geographical regions.

So if you were say a Melbourne metropolitan new car Dealer and a buyer has a 2015 Mitsubishi ASX as a trade in, a vehicle your used car team knows little about. Wouldn’t it be great to know that this model is the most sought after vehicle in Melbourne from a supply and demand perspective for vehicles that are less than 8 years old, have less than 60,000 kms and an average asking price of over $20,000?

What this means is that in the past 60 days 116 were sold but there are only 29 for sale which gives a Days Supply metric of 15 meaning that supply of this model for sale will run out in 15 days. Supply and demand says this is a car you should stock (all things being equal with the acquisition price).

Using the carsales LiveMarket Stocking feature, here’s the hottest used vehicles in Melbourne at 27 July 2017 (using the parameters above).

This list can be a pretty handy shopping list and reference point for any used car dealer.

Whilst Days Supply has been in available in Australian Dealers for some time, it hasn’t been used extensively from a buying perspective whilst some of the most profitable used car operations in the US use this metric to make great buying decisions.

Competitive sets
What better way of knowing what the competitive set is of a model of a car than comparing the models a consumer is searching, viewing and enquiring on?

We see millions consumers searching and finding their next car. Most consumers do not what they are going to buy next when they start their car finding journey on carsales. We see them search, view cars, narrow the search, view more cars, save cars in their Membership and finally enquire on cars, usually more than one.

By analysing this activity, we can categorically provide the true competitive set of each model of car and more often than not, the true competitive set is a little (or a lot) different to what the OEM thought was the competitive set for most cars.

The beauty of these data sets is that is always being updated and available virtually real time meaning that fluctuations in any competitive sets is quickly seen, providing enormous value to any “always on” marketing campaign.

Brand loyalty
When a consumer puts an enquiry through on carsales, many include their trade-in details with the enquiry. This information gives us a real-time view on brand loyalty, before the car has been purchased! Post enquiry surveys can then provide another level and view on brand loyalty too.

Comparing the make of a car being enquired to the make of the trade-in vehicle nominated immediately gives us a picture of brand loyalty. If I am enquiring on a Toyota Landcruiser and in the enquiry I include my Land Rover Discovery 4 as a trade-in, I think there’s a pretty good chance that I am thinking of swapping my Disco for a Cruiser wouldn’t you think?

When I am surveyed about my experience on carsales and if I bought the car I enquired on, this then provides rock solid evidence towards the brand loyalty indicator.

Using this data, brand loyalty can be measured daily and is accurate as opposed to waiting for registration details or OEM surveys.

The take out
These metrics are just three of a plethora of such metrics that carsales, Encar, Chileautos and Webmotors has available to benefit OEMs and Dealers, whether it be for effective advertising, pricing, appraising or buying cars.


Who has the No 1 Auto Classified Website in the World?


What if I said to you that the number 1 online automotive vertical website in the world in October 2016 was Autoscout24.ch in Switzerland?

I can, for the first time, compare sites from different countries on the same measures…..based on my traffic health algorithm on 72 websites in 38 different countries

It is not unusual for us to visit a new country and have 3 players swear they are number 1 in online auto classifieds.

One points to traffic, another to inventory and another to dealers (who needs revenue and profit anyway?).

At the end of the day……making money has to be the overriding measurement

Everyone wants to be number 1 and it seems this is especially so in the online world where to claim yourself as the number 1 player in your niche is vital for advertisers, investors, etc.
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This is hard enough to decipher within each country so how do we determine what automotive vertical website is the number 1 site globally?

From an online automotive vertical aspect, I see businesses claim number 1 in their country/region based on anything they can measure has them in front – visits, unique visitors, inventory count, dealer count – and the numbers can be near on impossible to test from outside the business.

You can’t do it by visits, inventory or dealers because a website operates in a country that has a large population with a huge car market will naturally have more visits, inventory and dealers – this does not make them the number 1 in the world.

I’ve wrestled with this for some time as carsales looks to strategically partner with more online automotive businesses around the world and I look at peers, competitors and targets so I’ve come up with a measure that for the first time doesn’t care how many visits, inventory or dealers are on the site.
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So getting back to who is number 1, how’d I come to this conclusion and what exactly is Autoscout24.ch number 1 in?

What I’ve done is created an index using a weighted algorithm for each automotive website around the world based on things that measure the health and stability of their traffic, namely user engagement and traffic sources. For me these metrics can tell you a lot about the online business and for the first time, I can measure websites from country to country on like for like data in order to get a picture of their real position in the market.

Like everything in online, one form of measurement doesn’t tell you the whole story but this index allows me to rank every website around the world to get an accurate picture of their traffic health irrespective of their traffic volume (although to get an “official” index a website must have over 100,000 publicly measurable monthly visits; this number is arbitrary).
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This means I can, for the first time, compare sites from different countries on the same measures. Traffic health should be pretty basic and each component would have individual focus within each business. Product teams would be all over user engagement metrics; SEO experts would be working to ensure the long tail of each website is indexable; and SEM spend would be closely monitored to ensure the right spend is getting the right results.

It’s pretty easy to correlate a high SEM spend, low direct traffic and a high bounce rate and what it means – poor traffic health – but as with most metrics to measure a number 1, they usually only tell part of the story.

In any case, based on my traffic health algorithm on 72 websites in 38 different countries, the top automotive vertical website in October 2016 was Autoscout24.ch (Switzerland) and businesses that are part of the carsales network including Encar.com (South Korea), Joinvillecarros.com.br (Brazil) and Chileautos.cl (Chile) are in the top 5 (the website rounding out the top 5 was Gebrauchtwagen.de in Germany).

Each of these websites has very strong user engagement metrics and extremely healthy, sustainable traffic sources.
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It’s interesting that some countries and in fact continents have common traits in user engagement and/or traffic sources that flow through the websites.

The regional Brazilian website indexes do not surprise me given the regional focus in Brazil where dealers and consumers alike are somewhat parochial to regional automotive websites resulting in high user engagement and positive traffic sources which sees websites that are now part of the Webmotors network high up in this indexing including Blucarros.com.br, Joinvillecarros.com.br, Compreauto.com.br and Meucarango.com.br.
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Anyway, my indexing algorithm gives me a great picture of where our peers, competitors, targets and carsales network sites are at around the world irrespective of the traffic they claim, inventory or dealer count.

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.


No Online Third Party Marketplaces


Online third party marketplaces like carsales, Webmotors, Soloautos, Chileautos and Encar play an important role in connecting car buyers and sellers.

For car buyers they provide choice and information in the one place when looking for their next car.

For car sellers they enable their inventory to be put in front of millions of buyers and compete on equal footing to other sellers no matter the size.

Now, let’s imagine an online world with no online automotive third party marketplaces. How would sellers get their cars seen by buyers and how would buyers find the right car for them?

Dealers would have to rely on their own website to advertise their cars to sell. Yes the vast majority have their own website today but it is a totally different cost and investment conversation if they had to rely on their own website to attract buyers.
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The massive investments and efforts third party marketplaces make to get the right car for the right buyer would be the domain of the dealer. Just like the old days when a dealer had to get a spot with good through traffic on a main road, smaller dealers would be up against it again.

The search engine giant(s) and those who have created business around it (i.e. SEM, SEO “experts”) would love it if dealers had to rely on how their website ranked in search, organically or paid.

Car buyers are buying new cars whether they be new or used – have you ever heard someone show you their “new used car”, they always buy a new car it’s just some are used – and third party marketplaces are the only place where new and used are presented equally.

This is an important part of today’s online world that I think is overlooked by most. Buyers come to third party marketplaces to narrow their car search so by mixing new and used together the buyer’s comparison set is broadened, bringing in cars they probably didn’t know yet could afford and/or were available.
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Advertising in print still wouldn’t be viable so investing in the dealer website at a level far exceeding today would have to be the way forward.

I’m not even sure what private sellers would do. I guess they’d have to advertise in the newspapers per pre-Internet and rely on the publisher to list everything online that they have offline, a throw back to the News Limited and Fairfax 1990’s business plans. Maybe the publications like the Trading Post would still have currency?

Facebook Marketplace isn’t even the answer. How many of you want to sell your car to a “friend” really?

Online third party automotive marketplaces are a natural fit in the same way a Google is for search in navigating in today’s connected world.


Danger Doing Business in Brazil? Pfft!


Embarrassingly, I’d never heard of São Paulo before carsales started to talk to Santander about its Webmotors business just a few years back.

Not many people in Australia know anything about São Paulo as I think when most people in Australia think of Brazil they think of Carnival in Rio, the Amazon jungle and lots of danger.

The danger part is what I get asked about the most each time I visit our Webmotors business.
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This is especially so when articles like naming world’s most dangerous cities in a news.com.au article on 28 January 2016 in which Brazil had 21 of the top 50 named and Latin America 41 of the 50 (http://www.news.com.au/world/the-worlds-most-dangerous-cities-have-been-named/news-story/094d3710262f823329bbea27f9eb3744).

São Paulo wasn’t on the list but when you have a city like São Paulo with 23m people (in the greater area) of which a great percentage are poor, there is going to be a lot of crime and this makes it dangerous; everyone I deal with in the city tell me this. It is not uncommon for people to be robbed at gun point or kidnapped.
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I will say straight up that in over fifteen business visits there over the past three plus years, I am yet to feel threatened (touch wood). In saying this, I make a point of not putting myself in possible positions with the bulk of my time split between the hotel, office and with local work colleagues.

From a business visitor aspect, here’s two examples of differences between São Paulo and Australia’s largest cities:

1 Road Rage
Whilst the most common after market accessory for cars is bullet proof glass and any medium to high end car is fully bullet proof, combined with horrendous and chaotic traffic with weaving drivers (especially motorbikes), in all my visits to São Paulo road rage just isn’t part of the scene. Merging is just part of what they have to do to get around. Try merging into Punt Rd on any given weekday and you’ll probably see some road rage and almost without exception, just plain ignorance and arrogance that can certainly turn dangerous!
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2 Celebration Time
I often visit the bar and restaurant neighborhood of Vila Madelena in São Paulo with the Webmotors team which can see thousands of people in the dozens of establishments drinking in the streets from early afternoon through to late at night and I am yet to witness one bit of aggression despite drinking allowed in public, bottled beverages are common on the street and the usual bumping into randoms in large crowds that you see everywhere. Imagine in Australia if alcohol could be purchased from street vendors in bottles and you couldn’t help but run into crowds? There’s a reason alcohol is barred in public and bottles are barred in most bars here – we are a nation of cashed up bogans (generalisation I know but a somewhat harsh reality).
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The poor usually have nothing to lose so for this reason the danger is somewhat harsher than drunk, cashed up bogans king hitting someone during a big night out or getting upset because you had the nerve to merge into “their” lane.

We Australians could certainly learn a thing or two on these things from São Paulo and Brazil in general.


Premium Verticals Up Against The Freemiums


carsales.com runs a Premium marketplace in the online automotive vertical space.

As carsales takes investment positions in more global online auto businesses (auto vertical), we are more and more competing against some very large Freemium businesses like OLX and Mercado Libre across Latin America, with each of them being general classifieds sites (horizontals).

Horizontal’s have a role to play in getting rid of your old household items. A car is not one of these

Webmotors.com.br, Soloautos.mx, Chileautos.cl and Encar.com are all online Premium players in automotive competing against the horizontal Freemium players.
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This is certainly not new to carsales as our largest competitor in Australia is also a horizontal. That’s not to say we don’t have serious competition from other Online auto vertical players in Australia; we’ve always faced this.

“The easiest way to get one million people paying is to get one billion people using.”

A Freemium website makes their money by charging for value added services once you have listed your item. I love Phil Libin’s (Evernote) quote “The easiest way to get one million people paying is to get one billion people using.” This is certainly what Freemiums focus on.

The Freemium general classified players of the world are following this by having a platform to advertise a car in the same way as your 8 year old couch; and it shouldn’t cut it for a car buyer or seller.

Remember this – a car is (almost) everyone’s second largest purchase in their life therefore deep information, CarFacts reports, inspection reports, reviews and above all else, trust and safety are all major factors and things only a Premium vertical online website is in a position to offer.
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The role we play in each of our global markets is as the Premium and Premier online auto vertical player; this means we need to do cars better than anyone. From searching, finding, researching and buying to selling with everything you need to make a quick, safe and profitable sale.

Our goal is to help you sell as opposed to helping you advertise; this is a BIG difference. This goal is different to Freemium horizontal player who is more interested in getting towards the “billion people using” rather than making the experience of each and every user one that represents the investment each is making.

Horizontal’s have a role to play in getting rid of your old household items. A car is not one of these from a selling or buying perspective.
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This is why we will continue to invest in our platform to provide the best information and tools to transact on the second largest single item in most people’s life’s in the safest way possible.

I think there’s a business there.


Achieving Economies of Scale


carsales push into the Spanish speaking Latin America countries of Mexico and Chile enables it to get achieve economies of scale in technology and other areas of its business.

The push has been on to deliver our web site platform and dealer applications that are successful in Australia, through Latin America with the specific goal of being able to “Spanishise” (probably a stretch to give it a word) the platform and get multiple uses from it, thus achieving economies of scale.
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We have learnt, however, that achieving economies of scale can sometimes be a false economy if not done with a complete appreciation of all the factors in the new geographical location you are entering. Just picking something up and dropping it in another country will not necessarily work.

carsales and Webmotors.com.br were keen to give Webmotors the “carsales feel” so in addition to adding the Ryvuss search engine, the three main pages being the Home page, Search Results page and Vehicle Details page were all redesigned using the carsales template.

When the development was complete we were all very excited to launch the new site but it didn’t take us long to realise that we had misjudged the Brazilian users. There were a few things they had on the old Webmotors site that they felt were super important in buying a car and were not backwards in coming forwards to tell us about it.
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Quite a few subtle changes were required to meet the expectations of the local users. This was our first lesson that picking up exactly what works in one country will necessarily be the optimum solution in another country.

What about regions within a country? Webmotors made two acquisitions of leading regional automotive web sites shortly after we invested in the business. The first was Meurcarango.com.br which was the number 1 player in the North East of Brazil. The second was Compreauto.com.br which was the number 1 player in the Sao Paulo country side.
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The plan was a simple one – let’s get some quick wins by using the Webmotors platform to drive each of the new websites. Each website would take on the same look and feel (with it’s own colours and logos) and same features. This would enable us to achieve economies of scale in maintaining one Brazilian wide platform down the track.

In both Meurcarango and Compreauto we quickly realized that the response from the user base within each region was similar to what we experienced with the Webmotors site.
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So while we won’t get economies of scale by simply putting a Spanish version of what we have in Australia, we will get enormous benefits through economies of scale across the platform driving the websites and the dealer applications. An example of where we are already achieving this is with our Ryvuss search engine which is already in use by Webmotors and Encar.com in South Korea.

Our dealer applications like Autogate is where we will see great benefits through “Spanishisation” as they are not as open to user nuances by country or region as a consumer facing website is. This is where we expect to get even bigger benefits from working on the one global platform.

All in all carsales is in a great position of leveraging from proven IP and a technology base that can move the needle in these countries. I can’t wait to see Soloautos.mx and Chileautos.cl benefiting from this.


Leading in a Global World


Not everyone aspires to be a leader or sees themselves as a leader but I bet in some part of their lives they are leading the way – and are good at it.

I’ve said in other posts and I’ll say it again, I feel lucky that over the journey I’ve enjoyed what I’ve done and what I do.

My role as carsales Director International is multi faceted in that I am a leader in the carsales core business as part of the Executive Leadership Team, I am the leader of our International team and I get to be the leader of some great businesses in other countries.
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I used the word “leader” three times there; not to be egotistical, the word isn’t in my title or job description but because it is a part of my role that I consider the most important; and it is one I enjoy.

So what does a leader mean? No doubt you would have read a few posts defining leadership and comparing a leader to a manager. I see it as setting the vision, the strategy, coaching, being part of the team, making the tough calls, not always being right, listening and sharing your experiences.

Most of all it is about making the right connections with people. I’ve said it before that I inherently believe “people do business with people they like”. This includes the leader and doesn’t mean you don’t make tough decisions that aren’t going to please everyone; it does mean that you need to earn their respect in the process.

I “got out of the way” of the best players and let them play

Leading is something I have undertaken from a business perspective and in my football career. You’ve probably read about how leaders should “hire the best people and get out of their way” and I completely subscribe to that.
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When I first joined carsales I had the task of bringing our LiveMarket product to life. I really enjoyed the first few months of not having to lead a team or worry about anything but the task at hand. This didn’t last long as I soon found out that I really missed leading a company, leading a team. Now I get to lead multiple, diverse teams and enjoy the challenge!

From a football perspective I was never the best player (or second or even third best) in any side I played in but I was able to successfully lead sides from a very young age (senior playing coach at 26) by getting the respect of my team mates and leading by example. I also ensured I “got out of the way” of the best players and let them play.
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This is the way I approach it from a business perspective as well. For instance, we have a controlling interest in Soloautos in Mexico and Chileautos in Chile. The first part of leading these businesses is to get to know the people, understand them and develop a relationship with them. This is essential to be able to lead these businesses from Australia with our carsales International team showing great leadership in taking these businesses along the journey.

it’s not that we are smarter than you guys, we’ve just seen it before

Our two minority positions in Webmotors in Brazil and Encar in South Korea are not too much different because as strategic investors in these businesses, the people inside look to us to show leadership in best practices to accelerate the growth of their businesses.

As a strategic investor in these businesses, carsales is using its experience and intellectual property as leadership pillars but it is all wasted without “walking the walk” after “talking the talk”. As I have said many times to our global friends “it’s not that we are smarter than you guys, we’ve just seen it before”.

If we can’t lead the way with this as the cornerstone, we’re in a bit of trouble (just my opinion).


A Unique Search Filter in Brazil


Webmotors‘ cars for sale search has a filter for bullet proof cars. To us at carsales, this is just one example as to why our global platform needs to accommodate nuances of local markets. After all, if we were based in Alaska and were moving globally to Australia, air conditioning may be a search filter that would need adding.

It makes sense in Brazil because there is a reason bullet proof glass is a must have new car after sale accessory – at some point it will most probably be needed.
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Just before the Rio Olympics news came through about a Russian diplomat being the victim of a robbery where two guys on a motorbike pulled up beside his car, smashed his window and demanded his watch; a gun was pulled by one of the robbers, the Russian diplomat pulled the robber into the car, took his gun and shot him.

For us in Australia it is an amazing story. I’ve been traveling to Brazil for carsales and our Webmotors business very regularly over the past 3 years and unfortunately I don’t find it amazing; “only in Brazil” as Fernanda from Webmotors would say.
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You learn very quickly that in traffic (and believe me in São Paulo there is plenty of it!) you do not sit there with your window down waiting for someone to come and relieve you of some valuable items.

Take a story that happened to one our Webmotors’ team members which is not an uncommon one). He was sitting in São Paulo traffic waiting for the lights to change when a motorbike pulled up with two guys on it. The passenger uses the handle of a pistol to bang on the driver side window to check if it was normal glass or bullet proof glass. It was bullet proof – pretty easy to tell the difference with the butt of a pistol – so they move on to test another car.
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He wasn’t so lucky the next time however when he had a flat tyre and was changing it on the side of the road. Two guys came up casually, waited for him to finish changing the tyre, produced a gun and drove off with car. Bullet proof glass doesn’t help when you aren’t in the car I suppose.

A lot of more expensive cars go an extra step and are fully armored. It is an after market item that has to be considered and factored into the price of driving a nice car.

I’m sure every country is different when it comes to options required in cars and why Brazil be any different!


A Key Component of an Acquisition


I’m a firm believer that in general, “people do business with people they like“. I know there are exceptions but as a rule I stand by this.

In order to like someone in a business sense does not mean you need to be mates; there needs to be a mutual respect between each other that business will be conducted in a manner that you both expect.

When carsales looks at an international acquisition target, local management is a key component of the decision making process. Very early on in the process I like to understand what the local management structure is going to look like and ascertain if there will be issues from day 1 after closing.

People do business with people they like” takes on an extra meaning when the management you are relying on to run the day to day operations of a business you have invested in is on the other side of the world. A true mutual respect as people first is important in this.
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This is why dealing with and forging close relationships with local management is a key component as a strategic investor. The structure of our partners in our 4 international acquisitions (Webmotors.com.br in Brazil, Encar.com in South Korea, Soloautos.mx in Mexico & Chileautos.cl in Chile) are somewhat different but the relationships we have/are building are very similar. In each business we are very close to the executive management; talking on an almost daily basis and sharing more than just business.

When we started Digital Motorworks, very early on we did some business with News Limited’s then new digital arm called News Interactive (News Digital Media) for their online jobs platform Careerone. We saw our personal relationships (we didn’t know them beforehand) as important and worked hard on it. Our work with Careerone expanded (and then exploded) and before we knew we were performing the same services to The Times of London (News International) which then spread by recommendation to TES Education and Emap (also both in the UK). When News were looking at starting an online automotive platform they came to DMi first.
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Yes DMi had some nice technology that served their needs but I have no doubt the relationships we formed within News Interactive were the driving force behind establishing our brand within their business.

Even internally, it is hard having a workable business relationship with someone you simply do not like, trust and/or respect.

People do business with people they like” can take on a number of meanings. It may be “just business” but business involves people and where people are concerned, it is better to like people than not.


Who Visits Car Classifieds Websites?


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The vast majority of the millions of people who visit carsales.com.au each month are looking to buy a car. As do the millions visiting our websites around the world in Brazil (Webmotors.com.br),Mexico (Soloautos.mx), Chile (Chileautos.cl) and South Korea(Encar.com).

Similarly, when a person makes the effort to fill in an enquiry form to send a dealer, they are in the process of buying a car.

I’m being a little flippant with these statements because we see the evidence every day and somehow it is missed in practice.

Take the following quiz (based on real data from carsales):
Dealer A and Dealer B are both franchised car dealers located in the same city and each stocks between 40-50 used cars. Dealer A consistently sells a car every 4 leads they receive while Dealer B sells a car every 9 leads.

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Now select your answer:
a) Dealer A is receiving better quality leads than Dealer B
b) Dealer A has more desirable stock than Dealer B
c) Dealer A treats every lead as an opportunity to sell a car

If you answered c) you would be correct. Dealer A gets onto every lead quickly, works them hard and gets a great result. More often than not the buyer doesn’t even purchase the car they required on but if the lead is worked like every sales lead should, it will one of the dealer’s cars not a competitors.

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It is not surprising that over 40% of the people sending leads to Dealer B actually purchase a car from another Dealer – most probably Dealer A.

Dealer B thinks that most of the leads from online are “tyre kickers” and as such gets on to some but doesn’t pursue others. We know this from consumer feedback that is provided back after an enquiry is made.

We see the same things in Brazil. Recently our Webmotors Dealer Director visited a dealer in São Paulo who said that they weren’t happy with the quality of leads coming from Webmotors.

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Our Webmotors guy asked him for some examples so the dealer presented him with three leads that were “rubbish”. Our guy asked the dealer if he could follow them up then and there, in front of the dealer and on behalf of the dealer. The result – two appointments for the dealer and the other had just bought from another dealer! So much for “rubbish” leads.

What was found (and acknowledged) was that the dealer didn’t value a lead from any online source like he did a walk-in or phone call. With a little education the dealer now understands the value of Webmotors as a valuable car buying channel.

carsales.com.au, Webmotors.com.br, Soloautos.mx, Chileautos.cl, Encar.com and other leading auto classified sites around the world invest millions of dollars to bring car buyers to dealers and it is in their interest to keep the quality intact – I can’t see how that is a bad thing.


Competing Against International Businesses On Our Turf


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Webmotors recent acquisition of BuscaCarros shows an interesting dynamic change to what carsales faces in Australia where in 19 years it has completed just the two acquisitions of automotive classifieds sites.

In 2005 carsales acquired/merged with Carpoint (and Boatpoint, Bikepoint, etc) and in 2007 Discount New Cars was acquired. In 2012 the ACCC (Australian Competition and Consumer Commission) blocked the carsales acquisition of Trading Post.
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Trading Post was an iconic brand from a print perspective but that did not move online so the interesting part of the failed Trading Post transaction is that Trading Post really offered no material gain for carsales.com.au (as opposed to carsales.com Ltd) because from an online automotive classifieds perspective, Trading Post was terminal; yet the basis for the ACCC blocking the transaction was centred around the impact it would have on competition in online automotive classifieds.
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The value for carsales was in a general classifieds platform where it was looking to compete against the emergence of Gumtree, owned by US online giant eBay.

The ironic part of this is that all the ACCC (along with all the submissions) succeeded in doing was stop carsales.com Limited, an Australian founded and run company (who pays its fair share of Australian tax), compete effectively against an international company such as Gumtree (who may or may not pay its fair share of Australian tax).
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I get the competition focus of the ACCC and agree with it in principle. The problem in this case was that the whole picture wasn’t considered and generally in Australia we like to cut down the “tall-poppys”; the issue with online is that Australia is not big enough to be viable market with 2-3 competitive players in each market vertical.

This opens the door for the international giants such as eBay, Amazon, Google, Facebook, etc to use their global reach to compete against Australian businesses with unfair advantages.

And make no mistake, the likes of Google, Facebook and Amazon are potential competitors for practically all online Australian businesses.