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The Autospace Online Marketplace Race for Supply and Domination


The Autospace Online Marketplace Race for Supply and Domination

Paul Sims shares an article that explores the battle lines being drawn in the digital auto marketplace space and why US companies should care.

The digital auto marketplace space outside the US is hot and battle lines are being drawn – today a discussion of Europe.
If you’re not based in Europe, why should you care?
If you’re in the auto space, you should expect US companies, both auto & e-commerce, to try to buy some European players as they look for growth, diversification, or simple multiple arbitrage.
If you’re an investor there are implications as Europe is ahead of Latin America and Asia in terms of this ecosystem’s evolution.
Besides the European car market being about the same size as the US car market, a similar battle is starting in Asia and Latin America so the differences between countries and regions will shrink in the coming years as the industry goes online.
I follow digital marketplaces of all types but certainly with my experience building 3 digital auto marketplaces and working with several others, I have a soft spot. Yesterday when I shared the announcement that Cazoo (publicly traded & one of several ‘aspiring Carvanas’ of Europe) was buying BrumBrum (1 of 3 key players in Italy) I thought I should share some analysis and observations I began thinking about before the holidays.
Just 90 days ago, Constellation Auto Group (TDR private equity backed & another one of the aspiring Carvanas) which not only owns market-leading C2B and B2B businesses but also owns UK online auto selling site Cinch, announced the merger of CarNext with Cinch. This puts Constellation Auto Group clearly up against Auto1 which also owns a market-leading B2B business. This clarified how the battle lines were being drawn up and who the players were if anyone hadn’t seen it coming already. The largest B2C online transaction sites (Cinch/CarNext, Cazoo, Aramis Group, Auto1) are fighting for marketshare across Europe and supply is a key move.
Key points include:
  • The BrumBrum deal
  • The CarNext-Cinch marriage
  • Supply chain shock