Kogan.com Ltd (ASX: KGN) has today launched its foray into the car market, with its new platform Kogan Cars going live.
This new service, which promises to make “buying and selling cars easy” is a direct threat to the market leader in this space – Carsales.com Ltd (ASX: CAR). Carsales has thus far dominated the vehicle classifieds industry with its carsales.com.au website as well as bikesales.com.au, boatsales.com.au, trucksales.com.au and even farmmachinerysales.com.au amongst others.
Carsales has made itself into a $3.4 billion company on the back of its successes at home and abroad – with the company now having a presence in South America, China and Malaysia. The company has built a deep presence in the Australian auto industry from its ‘Car of the Year’ Award for new vehicles to sponsoring sports like AFL, cricket, NRL and Formula 1.
What’s Kogan bringing to the table?
Upon its launch, Kogan Cars is offering price matching, cars ‘delivered to your door’, fleet discounts and cars delivered to your house if you’d like a test drive. At the current time, the buying service is only for new cars, and not available for second-hand or demo vehicles.
Needless to say, this will be a tough nut for Kogan to crack. But Kogan is a company built on disruption, cheap prices and innovation. In addition to Kogan Cars, the company has also recently launched an online marketplace (Kogan Marketplace) and plans to launch Kogan Energy, Kogan Super and Kogan Credit Cards, all by the end of the year. Kogan has also recently partnered with ASX payments newbie Splitit Ltd (ASX: SPT) so this is certainly an interesting stock to watch.
Time will tell if Kogan can give Carsales a run for its money in this market, but should prove to be an interesting space to watch.
The Kogan share price is 2.25% higher to $5 in afternoon trade, up 47% since the beginning of the year. The company is due to announce its results for the year ended 30 June 2019 on Tuesday 20 August 2019.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended carsales.com Limited and Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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