It looks like the used cars and vehicle classifieds space will finally see two major players rising and competing against each other. While CarDekho on one hand has been busy making some big ticket acquisitions, rival CarTrade has got itself in the groove as well, by shopping up smaller rival CarWale for close to $90 Million.
CarWale is more into the new-car buying space, and is backed by German media conglomerate Axel Springer. Axel had bought a controlling 91% stake in the company five years ago, and is sure to get handsome returns for the same.
The deal will be an all-cash one, with Vinay Sanghi, Founder of CarTrade also stating that both brands will continue to operate as independent ones. He adds,
Both platforms will operate independently. CarWale will focus on being the new car brand, while CarTrade will be the used-car brand.
With this acquisition competing, CarWale’s lesser known two-wheeler division, BikeWale will also move into the company as a new unit. None of the companies have commented on the finer details of the acquisition, neither have they announced a closing date.
Following India’s vehicle classifieds segment, one would know how cluttered it has become. The market suddenly saw a large number of heavily-backed players coming in, with more smaller rivals continuing to enter the space. This acquisition, and the one which saw CarDekho buying Zigwheels could perhaps be the first indications of the segment maturing and offering customers a more uniform experience.
The two companies, put together, will now have some 9,000 car dealers and 2.25 lakh used cars listed on the platform. After the deal, Carwale’s Dubey will join the combined entity as a cofounder and director with a decent equity stake in the parent company. Post joining forces, CarTrade is expecting a $400 Million revenue in the next four years.
Two other players in this field would be Quikr and Snapdeal, both of which more recently have been hugely aggressive with promoting their respective Quikr Cars and Snapdeal Motors. brands. The two however, are still not statistically close to either CarDekho or CarTrade, but could emerge as a major force considering the massive backing they’ve got.
Snapdeal recently announced a massive $200 Million investment into its cars division, and is looking to clock as much as $2 Billion in GMV from the cars segment alone.
Dubbed Snapdeal Motors, the platform has been introduced one year after Snapdeal first took up automobiles and added to its ever growing plethora of articles available for purchase.
As per Tony Navin, Senior vice president, Snapdeal –
We noticed huge pent-up demand in the automobile category. We have sold around 300,000 bikes since the launch in partnership with Hero and others. Around 57% of all the users were first-time buyers.
The company has already collaborated with HeroMotoCorp, Piaggio, Suzuki and Datsun and what’s more, is looking to enter into deals with other automobile manufacturers as well.