Carwow losses increase to -£29.6m in challenging sector

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【Summary】Carwow's pre-tax losses doubled to £29.6m in a challenging year for the automotive industry. The company expanded its business in the UK, Germany, and Spain but faced market deterioration due to factors like the Ukraine war and rising energy prices. Despite the losses, Carwow made planned investments to broaden its offerings and expects significant revenue growth in 2023, with revenues forecasted to exceed £50m.

FutureCar Staff Oct 10, 2023 9:21 AM PT

Carwow losses increase to -£29.6m in challenging sector

Last year was a challenging one for Carwow, as the company experienced a 119% increase in pre-tax losses, amounting to £29.6m. However, despite this setback, their turnover rose by 9% to reach £39.9m.

Throughout the year, Carwow expanded its operations in the UK, Germany, and Spain. Unfortunately, after a strong first quarter, the market conditions began to deteriorate. The company attributed this decline to various factors, such as the fallout of the Ukraine war, which resulted in rising inflation, central bank interest rate hikes, and a significant drop in consumer confidence.

Despite these challenges, Carwow remained focused on growing its Sell My Car Business and expanding its presence on YouTube. The UK channel alone gained 7.8 million subscribers, marking a 20% increase from the previous year.

Carwow's CEO, John Veichmanis, acknowledged the turbulent year for the automotive industry as a whole, stating that the company was not immune to the global factors affecting the sector. However, he emphasized that Carwow had made strategic investments to enhance its offerings for both customers and partners. These investments included the development of the popular Sell My Car service and significant investments in their OEM media product. Veichmanis believes that these decisions have been transformational and have positioned the company for a successful 2023.

Carwow's financial performance has shown a dramatic improvement year-to-date, with a notable increase in revenues and profitability. The company is forecasting that its revenues for 2023 will exceed £50m, a significant jump from the previous year's £39.9m. Carwow aims to solidify its position as the leading online destination for individuals looking to change their cars.

The number of dealers on Carwow's platform continues to grow, and the company has seen a record level of investment from original equipment manufacturers (OEMs) who choose to promote their new products through the platform. Group monthly profitability has significantly improved in 2023, and the UK business has already reached the break-even point. Carwow maintains a strong cash position and continues to make strategic investments to drive sustainable growth across all its markets.