Published on October 27th, 2023 | by Daniel Sherman Fernandez0
Why Is Carsome Selling Their Stock At Pickles Auction
We are surprised to find Carsome vehicles on auction at way below market price
Like we said a few times before, Carsome has a great business model for the Malaysian used car seller and whenever any of our readers and family members ask us about selling their cars, we always suggest a visit to Carsome and then after to MyTukar to compare prices and most of the time they end up selling to Carsome (because nearly always they offer a higher price for used cars).
So, it is great company to dispose your used accident or unwanted cars. However, we have asked the question in our earlier articles, how are they a profitable business. Or even are they making any money at all.
Well, we know for a fact that they have ‘burned’ millions of Ringgit in the past few years with zero profits and they were even able to purchase a couple of bankrupt motoring websites to keep their profile looking healthy as the rest of the media were ignoring their news.
However, it is all with investor money and with the hope of stock listing to cash out and pay back the millions lost over the years. This is not a new trend as we have seen this with many startups around the world and they love to use the word ‘unicorn’ when they are more just a ‘con’.
So, last week one of our readers who has been following our used car articles regularly shared some rather ‘tasty’ information with us.
He visited pickles auction to look for a used compact hatchback to buy. Looking around the pickles auction yard he noticed a few cars with ‘Carsome’ tagged on their windscreen. One particular car caught his attention.
It was a 2018 Volkswagen Polo 1.6L hatchback with low mileage and the auction price was just RM22,000.
Now this is strange as why is Carsome putting their stock on auction when they have a similar car in their online database for a market sale value of RM45,000 with 87,861 kilometers of mileage (see attached image below).
This move not only ‘cheapens’ the value of the popular VW Polo but also shows the hefty losses incurred by Carsome with just one car.
Then as the auction was underway, our ‘lucky’ reader decided to bid a low price of just RM18,000 and guess what, Carsome agreed with the bid and he is now a proud owner of a RM18k VW Polo with just 68,000 kilometers on it (which is lower mileage than the RM45k Polo).
(So there is a RM27,000 possible loss incurred on just one used car)
So, we are no mathematician or certified accountant, but it looks like Carsome buys high, sells very low to quickly turn around their stock and show ‘positive’ cash flow in their books to get new investors investing in their business to keep the healthy salaries and their large facilities running.
On behalf of Malaysian used car sellers and also buyers, we hope Carsome gets much more investor funding to provide great used car deals to Malaysians in the coming years.