Gumtree Revs Up Used Car Market

Online retailing giant Gumtree is making a significant move into the lucrative Australian used car market by marshalling its extensive customer base to attract buyers and disrupt established purchasing trends.

Drawing on its seven-million-a-month visitors to its marketplace, Gumtree intends challenging the established used car sales guides for a share of a market worth as much as $210m.

Gumtree Australia’s general manager Martin Herbst says the car market is still a vastly untapped source of opportunity for his company.

Martin Herbst

He says a priority for Gumtree will be publicising the company’s status as a used car vendor with an extensive catalogue of vehicles for sale.

“We have more used cars than the Carsales website but people don’t necessarily realise how big our supply and inventory is,” Herbst told the Sydney Morning Herald.

Carsales.com.au is the major website for buying and selling used and new vehicles in Australia. Since it was founded in 1997, it has grown into a dominating $3.2b behemoth.

CarsGuide.com.au is another established and successful major player in the car market in Australia.

The used car market is seen by experts as a lucrative source of revenue for any company that can devise a winning sales formula.

American automotive market analyst Manheim estimated as many as three million used cars change hands every year in Australia, compared to around a million new car sales.

Based on an estimated $70 registration fee to advertise a used car on a website, Australia’s used vehicle market is worth as much as $210m a year.

Herbst seems well qualified for the battle ahead to carve a segment of the car market for Gumtree, which is owned by eBay and can utilise the experience and knowledge of its parent company when needed.

“We do cross pollinate where it helps the user experience,” he told the Herald.

“We comb an inventory from eBay that’s contextual to give our buyers more options.”

Better known for trading and selling everything from flowers, to tools, theatre tickets and make-up on its website, Gumtree is now expected to undertake an extensive advertising and marketing campaign to promote its car sales pages.

Herbst, who supervises more than 100 staff at Gumtree, came to Australia six years ago from eBay’s head office near San Francisco.

He is understood to have tripled Gumtree’s Australian revenue as well as raising its profile as a marketplace with a wide variety of offerings.

“We are the leading local marketplace in Australia and our overall brand awareness is as strong as ever,” he said. “There has obviously been competition but competition is good.”