South Africa’s van der Walt brothers see WeBuyCars lose $516 million to cheap Chinese cars

WeBuyCars Holdings Ltd., the used-car dealer founded by South African tycoons Faan and Dirk van der Walt, has lost about R8.6 billion ($516 million) in market value this year as cheaper new cars from Chinese brands pull buyers away from the second-hand market.

The shares closed at R27.38 in Johannesburg on Nov. 2, down almost 43% since the start of the year. That gives the company a market value of about R11.4 billion ($690 million), down from about R20 billion at the end of 2025. The stock traded as low as R25.16 in the past three months, its lowest level in a year.

The slide marks a sharp turn for one of the Johannesburg Stock Exchange's most popular listings. WeBuyCars began trading in April 2024 after Transaction Capital Ltd. spun it off to shareholders, and its shares almost tripled in the first 15 months, peaking near R60 in 2025.

Chinese cars and thinner margins

New vehicles from Chinese brands, sold with aggressive pricing and finance deals, have taken a growing share of South Africa's car market. Established carmakers have cut prices in response, which has narrowed the gap between a new entry-level car and a mid-range used one. WeBuyCars has lowered its own prices to keep cars moving, squeezing its margins.

Higher fuel prices, driven by the war in Iran that began in February, and an interest-rate increase by the South African Reserve Bank have added to pressure on household budgets.

The strain showed in the company's results for the six months through March. Revenue rose 7.8% to R14.2 billion ($855 million), and the number of vehicles sold rose 2.3% to 93,519. But adjusted earnings before interest, tax, depreciation and amortization fell 1.3% to R789.5 million ($48 million), operating profit dropped 4% to R701 million and core headline earnings slipped 1.6% to R500.1 million ($30 million).

Cash generated from operations fell 77% to R65 million, while net interest-bearing debt rose 56% to R2.1 billion ($127 million). Cars were also taking longer to sell, with inventory days rising to 33.2 from 28.9 a year earlier. The company had expanded its parking capacity by 31% to 15,614 bays, faster than the growth in sales.

WeBuyCars still expects to buy and sell 23,000 vehicles a month by its 2028 financial year, up from about 15,500 now. Management has said Chinese cars should start reaching the used market in volume after a lag of two to three years. Chinese brands make up about 5% of the vehicles it trades today.

The company's financial year ended in September. Last year, it published a trading update for the full year in late October, and the shares fell 13.6% in a day when profit growth came in below what investors expected.

The founders' stake

The van der Walt brothers started the business in Pretoria in 2001 and ran it as a small dealership for years before expanding across the country. They sold 49.9% to Transaction Capital in 2020 for about R1.86 billion and a further 25.1% in 2021, taking the lender's stake to 74.9%. Faan is chief executive, and Dirk is an executive director.

In late January and early February, the brothers sold 18.7 million shares through I VDW Holdings, a company they jointly own, for R866.4 million ($52 million), at an average price of R46.27 a share. They said the sale was to diversify their personal investments. The shares now trade at about 40% below that price. The sale left the brothers and their associates with 5.81% of the company, or about 24.3 million shares.

At the Nov. 2 close, that stake is worth about R665 million ($40 million). The same shares would have been worth about R1.16 billion at the end of last year.

Outside WeBuyCars, the brothers have been building a property business. AttBid, a company they own 51% of alongside Atterbury Property Fund, agreed in February to buy out and delist RMB Holdings Ltd., which owns 38.5% of developer Atterbury Property, in a deal worth about R655 million ($39 million).

Figures were converted at R16.6 to the dollar.