AutoWallis’ Strategic Moves Focus on Chinese Brands and Car-Sharing

BBJ: Let’s start with some recent news: AutoWallis is now one of the few car dealerships that sells a Chinese car brand, BYD, to be exact. What do you expect from this cooperation?

Gábor Ormosy: We’ve been working for a long time to partner with Chinese auto brands in our markets, and it’s a pleasure to be able to represent BYD, the world’s leading manufacturer of new energy vehicles (NEV), at Wallis Motor Duna’s South Pest showroom. I see a great opportunity in the presence of Chinese car manufacturers in Europe, as they are at the forefront of electric vehicle ownership and can reflect this in their pricing. This is a huge potential because the European market has been squeezed out by low-cost small cars. The emergence of Chinese brands increases competition, which is most beneficial for consumers.

BBJ: Could more Chinese brands or manufacturers be added to your range?

OG: I think it’s possible because we have always believed in a wide range of brands, and it’s no different with Chinese manufacturers. We are in advanced discussions with several groups of manufacturers, including several brands; the first result was the recently announced cooperation with BYD.

BBJ: Several acquisitions have strengthened the group’s service and mobility portfolio. In which services and markets does AutoWallis intend to expand in the future?

OG: This year, we have made several service-related acquisitions, such as the purchase of Net Mobilitás Zrt., the operator of jóautók.hu and autó-licit.hu, the acquisition of Nelson’s fleet management business, and the addition of the Hungarian company Share Now. We are constantly exploring other opportunities, whether it be new acquisitions, representing new brands or launching new services in Hungary or the region. I look forward to announcing some of these shortly.

BBJ: You mentioned the Share Now acquisition. What benefits and challenges do you see in this move?

OG: The only thing missing from our service portfolio was essentially car sharing, and Share Now’s size, growth rate and business model were at a stage where, combined with AutoWallis’ professional background, it could create significant shareholder value for the group. We will be able to offer our primarily corporate customers a package of services that can meet all their needs, whether it is a long-term rental or a minute-based mobility service.

BBJ: How much did it cost to acquire Share Now?

OG: Wallis Autómegosztó Zrt., the operator of Share Now in Hungary, was acquired by AutoWallis for HUF 4.9 billion.

BBJ: Do you plan to expand the Share Now service beyond Hungary’s borders, or is the primary goal to strengthen and grow the business here?

OG: Regional diversification is the cornerstone of AutoWallis’ strategy. In the future, we will continue to offer the broadest possible range of brands and services in all our markets. So, there is a strategic rationale for expansion, and we will continue to think about how and when to do this once we have integrated and strengthened ourdomestic operations.

BBJ: Do you expect that, in the future, more people will rent or share an auto than buy their own?

OG: We predict that the number of car-sharing users in Budapest could increase fivefold in the short- to medium-term as this mode of transportation has experienced significant growth in recent years. Therefore, we expect this trend to continue as it becomes an integral part of urban transportation, as car sharing can be a greener solution, in addition to being more economical, thanks to Share Now’s fleet of low-emission and electric models.

BBJ: What impact could the acquisition of Share Now have on theAutoWallis Group?

OG: We expect significant synergies from the transaction in terms of operations and cross-selling opportunities. AutoWallis was already a major mobility provider in the region, but with this acquisition, we will cover the full range of mobility services. In addition, the purchase of Share Now is another crucial step towards expanding our green services and achieving our ESG goals.

BBJ: Since you mentioned ESG goals, to what extent does an ESG approach play a role in AutoWallis’ operations?

OG: We are committed to sustainable operations and social values, not only in our products and services but also in our continuous search for ways to further improve our energy efficiency. Accordingly, we plan to achieve ESG certification by the end of 2024.

BBJ: According to you, AutoWallis’ growth strategy is “crisis-proof.” What is the evidence for this statement?

OG: Fortunately, I can now say that we are able to develop and grow in a challenging environment thanks to the principles of our growth strategy; in addition to acquisitions, organic growth is also important. We can justifiably be proud of our ability to grow above the inflation rate. We also see further acquisition opportunities, which will contribute to strengthening the diversification that will ensure stability and further growth even in an adverse environment.

BBJ: AutoWallis’ first-half financials for 2023 are impressive. What steps has the company taken to achieve these results despite the adverse external economic environment?

OG: This is the fourth year in a row that we have reported record results, and this was also the case in our most recent first-half flash report. In addition to the almost 30 years of experience behind AutoWallis, our growth strategy and the acquisitions we have consistently made in recent years are behind these excellent results. We believe it is vital to stand on more than one leg, both in terms of vehicle makes and geographical coverage, and we now represent 22 brands in 16 countries in the region, with more than half of our sales coming from abroad on a sustained basis.

BBJ: AutoWallis Group exceed its 2025 growth targets by 2022. How?

OG: The acquisitions and transactions of recent years have been successful, and while the integrated companies have significantly increased our ability to generate results, growth has also been accompanied by efficiency improvements. The AutoWallis Group is, therefore, on a steady growth path, with further development being driven by our stock market presence, capital strength, diversified operations and regional presence. Taken together, this creates the opportunity to adjust our previously set sales and management targets upwards again, probably in the first half of 2024.

This article was first published in the Budapest Business Journal print issue of October 20, 2023.