Algeria, May 31, 2018

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Frontier Car Group heads to SA

Frontier Car Group (FCG), which recently saw an R1.1 billion ($89 million U.S.) investment from classifieds giant Naspers, is planning to launch its used-auto marketplace in South Africa soon.

The Berlin-headquartered company runs auto verticals in Mexico, Chile, Indonesia, Pakistan, Indonesia, and Nigeria. It buys vehicles directly from private sellers, which it then resells to dealers.

FCG CEO Sujay Tyle (LinkedIn profile) told Business Insider South Africa that South Africans will soon be able to sell their car, paperwork included, in under 45 minutes. (It’s worth noting that the publication is owned by Naspers subsidiary Media 24.)

FCG’s South African expansion isn’t exactly breaking news. Naspers’ investment technically came from the OLX Group and FCG has already said it plans to launch in the country, where OLX has a strong presence. OLX South Africa is the country’s second-largest horizontal behind Gumtree South Africa.

The latter has a very strong auto vertical, but Naspers ended competition in the sector when it bought South Africa’s leading vehicle marketplace Autotrader.co.za in Nov. 2017. Now it has a second auto vertical in its SA stable.

FCG will launch its still unnamed, new brand in Cape Town and Johannesburg in the next four to eight months. Tyle says consumers will be able to sell their vehicles at one of the business’ 45 inspection centers. “Fleet owners, similarly, can offload their entire fleet of vehicles through us with the same service.”

Dealers will be able to participate in auctions from their desktop or on their phones and will be offered financing, insurance, and ancillary services. They’ll then be able to list the vehicles they’ve purchased on OLX South Africa.

While its extra services are unique, FCG won’t be the only company operating this business model in South Africa. GetWorth offers customers a set price for their car, and then pays them the difference when they sell it. WeBuyCars visits sellers for on-site inspections before making a cash offer. It resells its inventory through auctions at WeSellCars. Both companies have listing agreements with Autotrader.co.za.

Another player is CarZar. Based in Cape Town, the site offers sellers an online estimate before scheduling an inspection appointment.

Tyle didn’t say how FCG plans to challenge these companies, but told Business Insider: “We expect to sell several thousand cars in the first year post-launch in South Africa.”

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