AutoWallis Group Heading in Fresh Directions: Austria and Online Sales
From left, Andrew John Prest (head of wholesale) and Gábor Székely (investor relations) of AutoWallis Group at the announcement of two new acquisitions.
The AutoWallis Group is opening up to online sales and Western Europe markets, with a significant acquisition and business development in each direction. The announcements align with the strategy announced last year by the auto retailer and importer, which is listed on the Hungarian stock exchange and aims to increase its turnover to more than HUF 400 billion by 2025.
Speaking at a press conference on September 21, AutoWallis said it would enter the Austrian market with its SsangYong car wholesale business. It also has plans to acquire Net Mobilitás Zrt., operator of the JóAutók.hu and Autó-Licit.hu portals. It
The acquisition of the exclusive import rights of SsangYong in Austria could be a decisive new direction in terms of diversification, the company argued. At the same time, the purchase of Net Mobilitás Zrt. is a first step towards the expansion of online sales. The moves follow the earlier announced acquisition of Renault Hungária by AutoWallis Group and a JV partner.
Gábor Ormosy, CEO of AutoWallis Group, said that the two latest transactions are significant in a changing and turbulent economic environment in which AutoWallis intends to continue to move forward at a dynamic pace, building on its capital strength and more than 30 years of experience and “crisis-proof strategy.”
He recalled that the group announced its new strategy last year, which expects the company, listed in the Premium category of the Budapest Stock Exchange, to show explosive growth until 2025.
Ormosy says it expects to become the leading auto retail and mobility provider in the Central and Eastern European region by the decade’s end. The group’s revenue could double last year to more than HUF 400 billion, while EBITDA could rise above HUF 14 bln. The projected growth is driven by the transactions completed or announced by the company so far, organic growth and planned further acquisitions, the CEO said.
“As you know, the company reported record half-year results in August, already generating more earnings per share in the first six months than last year,” Ormosy said. He did not rule out raising the target figures outlined above but noted that the ongoing and significant changes in macroeconomic conditions made it prudent to keep them at the same level for the time being. The management is working on further developments and acquisitions, the CEO added.
The acquisition by AutoWallis’ wholesale operation of the exclusive rights to import SsangYong vehicles in Austria means the group will now be present in 15 countries. While this further strengthens its already-dominant CEE position by taking it into a developed market for the first time, it is described as a pilot project.
The group has been the exclusive importer of SsangYong since 2012 in Hungary (where it has also retailed the brand since the spring of this year), followed by Romania, the Czech Republic, Slovakia and, from 2023, Austria.
Andrew Prest, head of wholesale at AutoWallis Group, said the move is an excellent complement to the strategy to organically through acquisitions, making the brands it already represents available in more and more countries.
He stressed that the current business development would allow AutoWallis to test its well-known and highly successful import brand at low risk in the market to the west of its strategic territory of Central and Eastern Europe.
It perceives significant demand for its value-for-money offering in a niche market segment and believes this will strengthen its visibility and position, increase its revenues and operational efficiency through synergies between group members, and support shareholder value growth. Prest said sales are expected to reach the five-digit mark in 2023.
The acquisition of Net Mobilitás Zrt., on the other hand, brings with it the JóAutók.hu and Autó-Licit.hu portals. These aggregate verified used car advertisements from qualified sellers and are leading players in the Hungarian market. Launched in 2017, JóAutók.hu is the second largest player in the market. It supports traditional used car sales as well as new and showroom car sales, where sellers are typically car dealerships, but individuals can also advertise on the site.
Founded in 2006, Autó-Licit.hu is a car auction portal where contracted fleet operators (multinational companies, banks, leasing companies, public companies, fleet managers, rental car companies, etc.) and a small number of private individuals offer their cars for sale.
The buyer side is open to registered national and foreign dealers and employees of contracted fleet managers. Commenting on the transaction, Ormosy said that the move is intended to support ongoing development projects, taking advantage of synergies within the group.
It was also a vital step in responding to the needs of the changing distribution model, where online sales channels are becoming increasingly important. AutoWallis will acquire Net Mobilitás Zrt. from WAM Immobilia Ingatlanhasznosító és Üzemeltető Zrt. via a share swap transaction. The transaction is expected to close by the end of the year.
This article was first published in the Budapest Business Journal print issue of October 7, 2022.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.