Belgium-based CarsOnTheWeb, currently trading about 40,000 units per year, has a plan to become Europe's leading online used-vehicle auction house. “By 2021, we want to triple in volume”, says CEO Johan Meyssen. And now COTW has the financial backing and expertise to achieve that goal.
As reported at the end of December, two Dutch investment funds, Vortex Capital Partners and ABN AMRO Participaties, have jointly acquired a majority stake in COTW. Johan Meyssen explains how this will accelerate rather than change COTW's plans for growth.
Johan MEYSSEN: “In the middle of last year, the COTW Management Team designed a strategy to triple our volume over a five-year period. We then went looking for partners to help us carry out that strategy. We were introduced to Vortex CP via mutual business relations, and were very much taken by their know-how and by their network of interests and investments. They are very involved in technology, and that is the road we want to take”.
“Online vehicle auctions are evolving, with more sophisticated technology, larger amounts of data and a more optimal use of buying power as crucial elements. These are fields in which Vortex will bring important know-how on board”.
And ABN AMRO?
“AAPart (ABN Amro Participaties) has an excellent track record in supporting succesful companies in their growth by elaborating buy-and-build strategies. Both funds have a history of collaboration, with AAPart concentrating on funding and Vortex – next to funding - on technology. In our new Board of Directors, Vortex CP will have two seats and ABN AMRO one, with two remaining seats filled by the other shareholders”.
Will the new majority shareholders want to implement new strategies?
“I don't believe there will be any major strategic shifts. The reason they wanted to partner with us is the fact that they believed 100% in the growth strategy that we at COTW had developed”.
Tell us a bit more about that strategy.
“We see two main elements to tripling our volume by 2021. The first is about enlarging our international footprint. The second is about striving for operational excellence”.
“At first, we want to expand our market share in the six markets where we are already present: Belgium and the Netherlands – even though we are already market leader in both – and also Germany, Italy, France and Spain. In these markets, we want to achieve growth rates of more than 15% p.a. We are also open to collaborate with other industrial partners”.
Will CarsOnTheWeb open up in new markets?
“Yes, absolutely. But first, let me mention that we already have access to used-car volumes outside our home markets, notably in the Czech Republic, Poland and Romania, via partnerships with lease companies and other players. We are currently looking at half a dozen countries to start up local projects and partnerships, three of them in Europe and two beyond”.
And what about the second element of your strategy?
“By operational excellence, we mean: an even smoother flow of business from our customers' point of view. This is where the Vortex know-how of Big Data applications in consumer business will come in very handy. Operational excellence will also have benefits for us: at any given time, we have between 2,000 and 3,000 vehicles available on our auction platform. By using our Data more effectively and pro-actively, we want to connect each customer to the right car(s), and vice versa”.
How will your customers notice the change?
“We are about to do a major overhaul of our IT systems, and already in the first quarter of this year, our customers will have a more user-friendly system at their disposal as a result”.
Where do you want CarsOnTheWeb to be in a year's time?
“Annual volume growth of about 15% means we should achieve 45,000 used vehicles auctioned off via COTW this year. We project the rate of growth to pick up significantly in the years to come. Our second target for next year is to shorten the lead time between end of auction and the client receiving the vehicle by one-fifth, from an average of 20 days now to 16 days by the beginning of next year.”