Carwow losses increase to -£29.6m in challenging year for industry

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【Summary】Carwow, an online car marketplace, experienced a turbulent year in 2022 with pre-tax losses doubling to £29.6m. The company cited factors such as the fallout of the Ukraine war, rising energy prices, inflation, and interest rate hikes as contributors to the challenging market conditions. However, Carwow remained focused on expanding its business in the UK, Germany, and Spain, and invested in its Sell My Car service and YouTube channel.

FutureCar Staff Oct 10, 2023 6:18 AM PT

Carwow losses increase to -£29.6m in challenging year for industry

Last year was a challenging one for Carwow, as the company experienced a 119% increase in pre-tax losses, amounting to £29.6m. However, there was a 9% growth in turnover, reaching £39.9m.

Despite the difficulties, Carwow managed to expand its business in the UK, Germany, and Spain. However, the company noted that the market deteriorated after a strong first quarter.

In the accounts filed at Companies House, Carwow attributed the market decline to various factors, including the fallout of the Ukraine war, the increase in energy prices, rising inflation, central bank interest rate hikes, and a significant drop in consumer confidence.

Throughout the year, Carwow focused on developing its Sell My Car business and expanding its YouTube presence. The UK channel alone gained 7.8 million subscribers, marking a 20% increase compared to the previous year.

Carwow's CEO, John Veichmanis, acknowledged the turbulent year for the automotive industry as a whole due to global factors. He also highlighted the company's strategic investments in broadening its offerings for customers and partners.

These investments included the development of the popular Sell My Car service and significant investments in the OEM media product. Veichmanis stated that these decisions had a transformative impact and positioned Carwow for a successful 2023.

Carwow's financial performance in 2023 has shown a dramatic improvement, with revenues and profitability experiencing a significant upturn. The company is forecasting revenues to exceed £50m, surpassing the £39.9m achieved in the previous year. Carwow aims to become 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 is witnessing a record level of investment by OEMs who choose to promote their new products through Carwow. Monthly profitability has improved notably in 2023, and the UK business has already reached break-even.

Carwow maintains a strong cash position and continues to strategically invest in all its markets to accelerate sustainable growth.