Prosus to exit OLX Autos to safeguard core classifieds business

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The vehicle trader has been affected by market challenges and a slowdown in second-hand cars

Naspers-owned Prosus has decided to cut ties with its vehicle-trading business OLX Autos, citing high costs and a slowdown in the second-hand car market.

On Thursday, the group said OLX Group’s core classifieds business has been performing well, with sustained growth and improving profitability, “and is well placed for further growth and margin expansion”. “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 Prosus and its shareholders. Prosus will explore all options for the OLX Autos business, acknowledging that significant value exists within local markets.”

He noted that one of the areas attracting much capital investment was the Autos classifieds business, as the group was building out physical inspection and delivery infrastructure. During the Covid-19 pandemic, demand for used vehicles shot up around the world as people searched for affordable transport options. At the same time, a shortage of microchips for vehicle computer systems meant the supply of new cars was limited.

Naspers’s SA-focused venture arm recently co-led a $15m equity funding round for the vehicle subscription start-up Planet42. Last week, t

 

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