With the increasing demand of automobiles and increasing use in technology, carsales is the revolutionary way in buying and selling automobiles. Since the registration of carsales. com. au domain in 1997, carsales have grown into a market leading position and have achieved a widespread coverage of the automotive, motorcycle and marine classifieds. By moving away from less flexible paper-print newspapers and magazines, carsales facilitate the sale of cars on-line and provide beneficial information to users and dealers.
Furthermore the board of directors and the key management staff encompass superior expertise that is well suited to the automotive telecommunication sector. Although carsales is a growing company and excellent management, however there are a number of factors that may cause changes in carsales objectives and financial performance. The risks and threats that may arise can be seen in the SWOT analysis1. In order to further grow carsales and provide more services, carsales is seeking to raise $250,000,000 from potential Venture Capital Firms.
Having meticulously conducted due diligence, it is our recommendation that carsales is a profitable seed company. Carsales is an innovative online automotive classifieds business, positioned to pioneer the next generation of the dot com saga. As a response to the development of technology and escalating demand for vehicles, carsales was established in 1996, spearheaded by Greg Roebuck. With the first office opening up in Melbourne, carsales has now spread around mainland Australia and different parts of New Zealand and Asia.
Carsales is always looking to expand its business, as it seeks to leverage from their competitive advantages by providing online classifieds in order to capture a larger audience, reduce costs and maintain a high level of accountability and service. Moreover carsales offers advice and services on related adjacent classifieds markets including motorcycles, boats, trucks, horses and other general classifieds, a representation of carsales’ diversity and broad business horizons. Currently, the carsales. com.
au website has listed over 150,000 cars for sale from more than 2,300 dealers with thousands of private vendors. It was awarded the Frost ; Sullivan 2007 online classifieds advertising advertiser satisfaction award in 2008. Moreover since November 2003, carsales has been ranked by Nielsen as the number one Auto site. This proves carsales importance and popularity amongst car buyers and sellers. Also, with a growing trend favouring online services, the number of users who have browsed and made transactions on the carsales’ website has also increased.
This can be seen from Figure 3, which illustrates the preference of private customers in using carsales. com. au relative to printing media and other internet sites from 2005 and 2009. Clearly, in comparing the two periods, the use of printed media involving the newspaper or trading post has effectively decreased from 14% to 6%. Conversely products sold on Carsales have increased from 65% to 77%. Furthermore in the Australian market, amongst other carsales competitors, carsales is the only significant pure online competitor, with a core focus on online automotive classifieds.
This can be further reinforced by Figure 4. Government Policy Over the years, the Government has passed through legislation of various taxes, concessions and grants on vehicles, to meet the increasing demand for motor vehicles. These policies cause shifts in the market response to motor vehicles, and play a huge role in the operation of carsales’ business. Since 2008, both the Federal and State Governments have levied a luxury car tax on new cars priced over a certain threshold; this has increased the demand for small cars.
Furthermore the State Government currently levies stamp duty and ownership of new and used cars. Moreover the Government provides incentives in the form of concessions, grants or financial assistance. This includes the recent trade-in policy of old car to a new efficient green car, as a result more people have been searching and purchasing hybrid varieties. Market Position and Competitive Strengths Carsales boasts an incredible track record of strong revenue and earnings growth over the past several years.
Not only do these positive results reflect great management and invest strategy, but places carsales in a leading market position. This is characterised carsales’ highly successful long-term focused business strategy. One of its core long-term business objectives is to protect and grow its unique business concomitantly enhancing carsales’ revenue. As a result Carsales has established a dominant role in its telecommunication and car industry, accepting a leadership position which builds greater barriers to entry for new competitors trying to enter the market for a share of the gains.