Prosus is to jettison OLX Autos, it has announced. Blaming the move on the state of the market, the Naspers subsidiary is exploring “all options” for the used-car business.
“Most recently, OLX Autos, the adjacent car transaction business [to OLX Group], similar to listed peers, has been affected by ongoing macroeconomic and market challenges,” stated a post on the Naspers website, attributed to JSE sponsor to Naspers, Investec Bank Limited.
“Higher cost of capital, high inflation and reversal of pandemic trends have led to a significant and persistent slowdown in the second-hand car market.”
The company added, “While OLX Autos has built leading positions across many of its key markets as a result of its strong technology platforms and local focus, pursuing a global growth strategy is no longer the right approach for our shareholders. Prosus will explore all options for the OLX Autos business, acknowledging that significant value exists within local markets.”
Naspers contrasted the performance of OLX Autos with the core classifieds business of OLX, describing the latter as “profitable, cash flow positive, and fast-growing,” and “well-placed for further growth and margin expansion.”
In November, Prosus announced in its H1 FY2023 results that the trading loss of the classifieds segment had widened to $159 million, up from $42 million in the year-earlier period, “reflecting significant investment to scale OLX Autos,” according to the company.
In January, OLX, announced it would cut 1,500 jobs internationally. The announcement was made in India, and initially reported by the Financial Express.
“The exit of OLX Autos will lead to a significant improvement in the profitability profile of the Classifieds segment as a whole,” added Naspers in its message on Mar. 2. “We are committed to working through this process quickly and efficiently in the interests of all stakeholders.”
OLX Group is based in Amsterdam, as is Prosus. South Africa-based media giant Naspers owns around 57% of Prosus.
As well as OLX Autos, OLX Group brands include: AutoTrader.co.za, 321sprzedane.pl, WeBuyAnyCarUSA.com, StandVirtual.com, Property24.com, OtoPlus.com, OtoMoto.pl, OtoDom.pl, OLX.com.br, OLX.com.pk, LetGo.com, ImoVirtual.com and AutoVit.ro.