Question 1

Is the online car advertising market still a high-growth sector?

Accepted Answer

The market is entering a mature phase, with classifieds growth slowing to a 5.9% CAGR through 2021. However, digital display advertising is a significant outlier, projected to grow at a 15% CAGR to reach A$1,045mn by 2021.

Question 2

How dominant is the current market leader?

Accepted Answer

Carsales.com maintains a commanding position with a 50% revenue market share and double the traffic of its nearest competitor. Despite this, its share of listing volumes stood at 35% in early 2017, facing pressure from high-volume free platforms.

Question 3

Are there any serious challengers to the established classifieds sites?

Accepted Answer

Gumtree has emerged as a disruptive force in the used car segment, capturing 28% of listing volumes through its free-to-post model. Additionally, digital-only dealerships like HelloCars are bypassing traditional classifieds by selling fixed-price, inspected vehicles directly to consumers online.

Question 4

What is driving the underlying demand for vehicles in Australia?

Accepted Answer

Car affordability is at its highest level in four decades, with an entry-level sedan requiring only 21.6 weeks of average wages in 2016. This macroeconomic tailwind supports a total vehicle advertising expenditure expected to reach A$835mn in 2017.

Automotive Marketing Outlook: 2017

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