WeBuyCars is the biggest car-buying service in South Africa. In September, Transaction Capital bought 49.9% of the business from the van der Walt brothers. Last week the stake was increased to 74.9%. Faan van der Walt joined the BizNews Power Hour to chat about the deal and told host Alec Hogg about the beginnings of the company.
Faan van der Walt on his background:
I did a five-year stint of teaching, after qualifying. Two years in South Africa at a primary school and from there, my wife and I went to the UK and we taught there for another two years. In those years – 1999 and 2000 – you could earn quite a bit through teaching in the UK. It was about R10 to the pound back then and you could earn about ÂŁ110 per day. We decided that we will go abroad and do this for a two year period, but try and live off one person’s salary – which we managed to do by being very frugal and staying in a very humble flatlet that we rented.
It was a really good move for us. We learned a lot. It opened my eyes and, being brought up very conservatively in South Africa, it was a leap of faith. I remember the day I went to resign at the South African school where I taught. The headmaster said, “you’re making the biggest mistake of your life. You shouldn’t do this – you’ve just grown into becoming a proper teacher. We’re ready to give you more responsibility.”
I said, “well, sorry. I’m going.” He said, I’ll regret it later. That served as motivation, to prove them all wrong. Even whilst teaching in the UK I also bought and sold cars, it was like a childhood passion. We were brought up not poor, but we had limited resources and I never had a car of my own. I had to buy and sell and trade to get my own car eventually, while [I was] studying. I bought and sold little bargains in the newspapers. I learned a lot and my brother, who partnered with me later on, is very different to me. He’s more of a creative dreamer. He came up with the idea to rather advertise and capture that audience before they put their car on the market, just so that you’ve got that mandate to pursue that vehicle before everybody else pursues it. That helped us a lot in the early days.
On picking up business tips while living in the UK:
iIn those years, it didn’t exist in the UK. We saw these big car supermarkets while we were there, but there weren’t any car buying services at the time. We started the WeBuyCars website in 2001. We didn’t learn this from anyone. We just developed the idea as we went along and improved it consistently. It was interesting to go and visit the UK players in the years [that followed]. It’s become a really big. Currently we buy, more or less, about – I think 8,000 vehicles this month. We have warehouses across the country. In fact, we opened one today in Germiston. It’s the latest one, and started operating recently. Each of these warehouses can house, more or less, between 500 and 1,200 vehicles. That’s where they’re housed. We’re lucky that we turn our stock really quick. Within 24-25 days, everything that we buy, on average, will get sold – it’s a quick turnover.
On ensuring that cars are of a good quality:
I think the industry has a bad reputation and we – and many other players in this space – are trying to change the perception the public have about the used car dealership. But there is still a long way to go. What we’re doing currently is to have an inspection done on the vehicle through an independent party. Every single vehicle that we purchase will have an inspection by Dekra. These people are able to do a comprehensive roadworthy test on the vehicle. All that information gets displayed on our website.
In many cases, it’ll count in our favour where you get the peace of mind. You know you’re buying a pristine, good quality vehicle. But at the same time, some vehicles do have faults and we display that just to be transparent. The buyer knows they’re getting a vehicle at a very low price. But they’ve got to keep in mind, there are some things that needs to be done to it. We sell a large percentage of our cars to vehicle dealers – around 40% – that goes to various dealers ranging in size from OEMs to the independent dealer on the street.
Read more:
- Transaction Capital increases shareholding in WeBuyCars to 74.9%
- Transaction Capital: CEO David Hurwitz on WeBuyCars
- Advice for entrepreneurs from titans of industry, Neal Froneman and Faan van der Walt
