Eagers Automotive (ASX:APE) car sales coming to a mall near you

Eagers Automotive Ltd (ASX: APE), formely AP Eagers, is planning to start selling cars at shopping centres and near an airport.

Mitchell Lawler

Mitchell stumbled upon the concept of investing when in high school, devotedly urging his parents to put some money into a handful of technology companies with increasingly popular products among his demographic – many of which have gone on to great success. It wouldn’t be until 2017, some five years later, that Mitchell became an investor of his own money. Having studied and worked as a mechanical engineer in the building services industry, Mitchell takes a methodical and analytical approach to evaluating businesses. Rather than relying purely on numbers, Mitchell drills beyond a company’s metaphorical mantle to unearth obscure patterns or competitive advantages that would go otherwise unnoticed. His expertise resides within areas such as software, consumer goods, and building services equipment. However, his quest to find quality companies that set the industry standard and flex some degree of an impenetrable position has no limits – small cap to mega cap, cosmetics to healthcare – if it’s an exceptional business it’s on his radar.

Published February 17, 2021 6:55 pm AEDT

The Eagers Automotive Ltd (ASX: APE) share price could be on watch tomorrow, following the circulation of plans to start selling cars at shopping centres and airports. The car sales conglomerate, formerly known as AP Eagers, closed down 2.2% today at a price of $13.87.

Photo of a happy couple with their new car and car keys. — Image Source: Getty Images

Cars in a mall, get ready for it

Reportedly, the Eagers conglomerate that delivered 10% of new cars sold in Australia last year plans to open showrooms in shopping centres by the end of this year. Multiple stores are being removed and made way for the supermarket-sized display area expected at the Indooroopilly shopping centre.

On top of this, Eagers will also begin construction of a 90,000 square metre complex near the Brisbane airport that will be accompanied by a 2.5-kilometre test track. The mega facility will also have over two dozen showrooms and service centres. This development would be one of the biggest in the world.

The airport facility is anticipated to be operational in 2023, with preparations already underway to begin construction.

The rationale behind this new approach explained by COO, Keith Thornton, is to engage potential customers in new ways in a stress-free environment. Adding, "The great thing about a shopping centre showroom is our customers are already going there."

A shift in shopping centre utilisation

Following the aftermath of COVID-19 on traditional bricks-and-mortar stores, as well as the continued digitisation of shopping in general, businesses are finding new ways to adapt. It is becoming a common theme that shopping centres are shifting towards a more experiential destination.

Many shoppers probably weren't thinking of trying their next car as part of the new mall experience, but who's complaining?

AP Eagers share price snippet

It has been a solid 12 months for Eagers shareholders, witnessing the share price rise 51.4% over the period. It hasn't been without its nail-biting times though. Shares in the auto group fell to a 52-week low of $2.50 in March, before steadily climbing to today's $13.87 price point.

The company's market capitalisation is now $3.64 billion.

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