Analysis of PCarMarket's 2023 Sales

PLUS: The HUGE opportunity to become the 3rd major player đŸ˜±

Author

Sam Gold
January 15, 2024

The Daily Vroom

Good morning, Vroomers! 👋

It's 1am here in LA, and while most might be lost in the world of Netflix, I'm wide awake (two red bulls in) and energized, diving deep into the heart of the online auction market. No rest for the wicked, right? Tonight, I'm bringing you a special edition that's been a labor of love, packed with insights and straight-to-the-point analysis.

Today's spotlight? We're zeroing in on the current state of the online market, specifically here in the US. It's a dynamic, ever-evolving beast, and there's a particular focus on the race for the coveted third position. Who's going to clinch it? The suspense is as thick as LA smog!

And that's not all. Riding on the wave of Friday's record bid, I've sifted through PCarMarket’s 2023 sales data to bring you the crùme de la crùme of insights. Expect highlights, surprises, and of course, my two cents on what all this means for the market and the players within it. Stay tuned, because this edition is going to be one for the books! 🚗🏁🔍

STATE OF THE MARKET

As of today, the online auction market for vehicles is experiencing a significant boom. In 2023, over 44,000 vehicles were sold in online auctions, surpassing the previous year's total by more than 2,500. This surge is not limited to auction sales alone; many deals (not included in the numbers above) are also being finalized post-auction, and the 'buy it now' sections on various sites are bustling with activity. This trend is not just a steady month-on-month growth; it's a monumental year-on-year escalation.

Another key trend we've discussed recently, and one that's gaining undeniable momentum, is the shift towards selling higher-value vehicles online. This movement is becoming more pronounced, as evidenced by the recent auction on PCarMarket, where a car attracted a bid exceeding $4 million just last Friday. This significant event is a clear indicator of the market's evolving confidence in online platforms for handling high-stakes, luxury car sales. It's not just about selling more vehicles online; it's about the growing trust and reliability of these platforms in managing transactions for premium, high-value automobiles. This 'interesting' auction (see my take on it below) on PCarMarket is just one example of how the market is adapting and expanding, a trend we can expect to see more of in the future.

Right let’s dive into the key players, shall we? Detailed number-crunching, like my deep dive into Hagerty and Bring a Trailer Premium listings, is in the pipeline.

Leading the pack in this dynamic market is the billion dollar company Bring a Trailer, with an astounding average of 2200-2500 vehicle sales per month. In second place is Cars & Bids, averaging around 470-550 sales monthly.

In the UK, the competition takes a different turn with Collecting Cars and Car & Classic. Collecting Cars, with an ever growing global presence, (not yet here in the U.S.) often deals in higher-priced vehicles, whereas Car & Classic caters to a similar volume but at different price points, both moving about 250-450 vehicles a month.

Over in the US, after the top two, PCarMarket currently claims the third spot, selling on average 60-80 vehicles through their auctions each month. But the real story here is the immense potential for growth and increased valuation which is I’m sure what these platforms are looking at. Capturing the third position could lead to a valuation of around $50 million, and advancing to the second spot could propel this to over $100 million, assuming consistent performance across key business metrics.

This situation presents a massive opportunity. A company that can combine some of the following: savvy management, cutting-edge technology, innovative features, influencer collaborations, smart pricing, strategic partnerships etc.. stands a chance to dominate this space.

PCarMarket, currently in third place, has the opportunity to fortify its position or even advance. However, they face stiff competition from several contenders, all vying for a chance to reshape the industry.

So, who's in the ring? Here's my top 10 lineup, in no particular order:

  • Sotheby’s Motorsport

  • Hemmings

  • Bonhams Online

  • Clasiq

  • Autohunter

  • MB Market

  • Hagerty

  • Marqued

  • 427stingray

  • ACC Auctions

And let's not forget, at least one new player is set to enter the scene soon. We’ve seen some really big players enter the industry over the last 12 months and struggle, it’s not easy! But if you can crack the code, oh my it can be super lucrative.

A few of those above platforms are niche, specializing in specific makes or models. This specialization might limit their ability to make a significant volume impact, but it doesn't preclude them from carving out a profitable niche for themselves.

So, the million-dollar question is: Who will clinch the third spot? And can Cars & Bids make a run for Bring a Trailer and increase their sales massively in 2024? (more on that in a future edition).

Which company(ies) will consistently deliver top-notch listings, sales, and, hopefully, an exceptional user experience? This is a golden opportunity for a company to really shake things up and leave its mark. We're at a point where strategic decisions, innovative approaches, and market understanding could lead to significant changes in the online auction market landscape. It’s an exciting time, and all eyes are on these contenders to see who will emerge victorious, transforming their business and potentially reshaping the industry. Let's watch this space closely to see who rises to the challenge this year and makes a lasting impact.

One last thought to consider - I'm absolutely convinced that Bring a Trailer isn't just resting on their laurels. They're definitely not content with where they are; growth is clearly on their agenda. They're in the midst of a complete overhaul of their platform, and I'm anticipating we'll see some significant developments from them in 2024. Remember what Randy (BaT founder) shared with us back in November? Read the whole interview here.

‘Even as more and more listings are added to BaT, there is still ever growing demand. The main challenge as site volume increases in the future will be to keep each listing special and discoverable. We have some exciting ways to do that and it will be a continual evolution. We aren't standing still and as long as we maintain the transparency and community we are famous for, the road ahead will be very exciting.’

PCarMarket’s 2023 Sales

A Deep Dive into PCarMarket's Operations: After thoroughly exploring PCarMarket's sales and operations, I've gathered some insightful observations to share. Let’s begin with the positives.

The Admirable Aspects of PCarMarket: In a competitive field dominated by well-funded giants, PCarMarket has impressively claimed the third spot in the U.S. market. This achievement likely stems from their astute management and consistent ability to source, list, and sell a diverse range of vehicles. Many vehicles sold here could easily have been featured on more prominent platforms. From my conversations with various sellers, the consistent feedback is about PCarMarket's proactive involvement in each transaction, particularly in ensuring a deal post-auction if the reserve isn’t met. This level of dedication deserves recognition. đŸŽ©

Areas for Improvement: Naturally, no business is without its areas for growth. One aspect where PCarMarket could enhance its offerings is the website user experience. While not excessively poor, (it’s not Hemmings bad!) it does lag many of their competitors in terms of speed and modernity. Another point of consideration is transparency. Direct communication with sellers no doubt happens, but the website lacks basic company information such as contact details or an address. Who am I buying from and where are they located are questions that can’t be answered without doing some internet digging. This absence may seem minor but can impact user trust.

A Case Study - The LaFerrari Auction: An incident that stands out is the recent auction of a 2014 Ferrari LaFerrari, estimated at around $4-4.5 million. The auction closed at an impressive $4,150,000, possibly a record for the site. However, the post-auction process lacked clarity and immediate updates, leaving bidders and spectators in the dark. Unlike platforms like Cars & Bids, which promptly indicate 'Reserve Not Met,' PCarMarket’s approach seemed less transparent. The auction process meandered through various stages, from silence to a lower offer in the Deal Tank, and eventually ended with no sale, all without any official commentary. This approach might seem opaque to some observers.

On a side note, the offer looked like a good one considering the car was bought for $4,075,000 last January. But since it was bought at a physical auction, no doubt the commission was very hefty which would makes the $4,150,000 a few hundred thousand loss (at best). Just shows why online auctions that charge a fraction of these fees are growing so quickly. This is where the future is.

The Essence of Transparency and Technology: The question arises - why doesn’t PCarMarket display immediate post-auction results like everyone else in the market? I don’t want to have come back later to find out the results of an auction I’ve been following for a week!

Is it a technological limitation or a strategic choice? Feedback from numerous users who have interacted with their auctions suggests a general preference for more transparent and immediate auction conclusions. Enhancing the website and improving the transparency of auction results could significantly benefit PCarMarket.

Embracing Change and Innovation: It’s possible that PCarMarket is content with its current trajectory and operational model. After all, listing high-value vehicles like the LaFerrari is no small feat. However, in a rapidly evolving market, continuous innovation and adaptation are crucial. Staying ahead of the curve in technology and customer engagement is key to maintaining and growing market position.

My feeling is that if they don’t innovate or move the needle, there are enough companies on their tail that will innovate, have better tech, etc., and take their place. The potential monetary rewards for being third are huge. No company has the luxury of sitting still
 🚀 Time will tell, but for now, PCarMarket deserves a round of applause for their achievements. 👏👏👏

Now let's take a closer look at how they fared in practice.

Before diving into my summary, I'd like to clarify that the figures I'm about to discuss are solely from their auction sales. It's important to note that PCarMarket also conducts sales through their Deal Tank (Buy It Now option), and they deal in memorabilia as well as well car parts etc..

The year kicked off with some booming sales, such as the 2010 Bugatti Veyron that was sold for $1,650,000 and they ended the year in December with the sale of the 2015 Porsche 918 Spyder for also $1,650,00.

In the above chart, you'll find a breakdown of vehicle sales month by month. Aside from a small dip in June, they were extremely consistent.

Below is a graph depicting quarterly sales which shows no growth per se, but just consistency.

For those of you that like to see a more granular detail of the sales timeline, here you go. There are a few outliers, but in general there are no specific trends that we can take anything away with.

Above, we have a list of the top 10 vehicles that made significant sales last year. Considering the amount of Porsche’s they sell (see below) only 50% of the top 10 sales were Porsche’s. This one-owner 4k-miles 2005 Porsche Carrera GT that sold for $1,320,000 is a favorite of mine!

The fees that PCarMarket ought to have collected are depicted in the figures above, peaking at just above $250k for January & February. It's worth noting that these numbers are based on the assumption that every deal materializes, which, in reality, is quite improbable, if not impossible. There will likely be a small percentage of deals that do not come to fruition for various reasons. As I stated above this only includes their auctions. It also does not include the $99 they charge for each listing.
The average fee was $2,818.18.

You can clearly observe spikes in sales activity during the months of January and December, aligning with the auctions of their highest sales.

The average sale price on PCarMarket in 2023 was $80,852.55

It's hardly a shock that Porsche is their model of choice. What caught me off guard, though, was the sheer proportion of their sales attributed to Porsche. No other model even remotely matches this. Whether this singular focus hampers or boosts their growth is something I'm still pondering.

The most popular model of Porsche sold on their site was of course the 911. No other model comes close to it. The average sale price of a 911 on their site was $102k. The most popular year for 911’s they sold was 2003.

This last chart really sums up all the above findings with one word, consistency. This is what they’ve been throughout 2023. Would love to hear your opinion on them. You can add comments below or vote in the poll and add a comment to your vote.

Can PCarMarket keep their position in the market?

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