CarTimes Automobile and Carsome Group may differ in their core business models and how they transact, but with the merger that brings together their complementary strengths, the owners of both companies say they are set to capture a bigger piece of the regional car trading market.
CarTimes Automobile, which was established in 2001, is an award-winning auto company in Singapore and one of the largest in the country. The company offers a suite of services that also includes car rentals, financing, insurance and servicing.
Carsome Group, which was set up in 2015, is Southeast Asia’s largest integrated car e-commerce platform. It has transacted over 260,000 cars since its inception, and sells more than 18,000 cars on a monthly basis. The company, which has operations across Malaysia, Indonesia, Thailand and Singapore, is also Malaysia’s first unicorn that was valued at US$1.3 billion ($1.79 billion) as at September 2021.
Following the merger, CarTimes will now be known as “CarTimes, powered by Carsome”. The merger will see Carsome strengthening its market presence in Singapore, leveraging CarTimes’ current market leadership.
As a merged entity, the expertise from both companies will be driven by “digital innovation to fulfil the mutual commitment of providing better peace of mind to customers at every touchpoint of their car transaction and ownership journey”, reads a statement released by CarTimes on July 26.
The owners of both entities made their moves decisively: it took less than a year for both parties to confirm their interest and seal the deal. “We first learned that there was a party who was keen in May 2021 and began our interim due diligence. We signed the term sheet in August 2021. The merger was formalised in March this year,” says Eddie Loo, CEO and managing director of the CarTimes Group.
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“The merger came really quickly… simply because a lot of things that we want to do is already aligned between both [of our] teams. So it didn’t take a really long time for us to get to this point,” says Eric Cheng, CEO of Carsome.
Loo and Cheng both met during the Covid period, first through a call, before Cheng flew in and met Loo sometime during the end of last year. “We have known each other’s company for a long time, but to be actually meeting each other and talking about this [merger], it was very recent,” says Cheng.
According to Cheng, both groups share a lot of “common beliefs in the things we want to do”. “CarTimes has been around for over 20 years in the auto industry and they have done a lot of things so far. We are very impressed by that,” he says. “And they’re also very aligned to us as to how we think about digitalising the industry even further, specifically on the experience that [customers] would enjoy buying and selling cars.”
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“So joining forces together would make a lot of sense, so that we can bring in our value add, which is technology and data, to get in with them, with everything they’ve built so far in Singapore. We can take this to the next phase of growth. That’s how that conversation started and very quickly, we crossed the line [in terms of formalising the merger],” Cheng adds.
Different backgrounds, different strengths
While both companies are in the automobile trade, they come with different backgrounds and different strengths. “CarTimes is a traditionally run smalland medium-sized enterprise (SME) that is in the automotive space, while Carsome is a tech-driven, new-world kind of company that is also in the automotive space,” says Loo.
“We are in Singapore, while Carsome has presence in the rest of the region — Malaysia, Thailand, Indonesia — and they most recently expanded to the Philippines. They are extremely strong in the wholesale space. This business model works primarily overseas where the countries are big and have different states, there is also a lot of arbitrary charging to be done. So what they do is that they link up consumers to the dealerships, which is the wholesale model.”
CarTimes has been focused on the business-to-consumer (B2C) model. Loo says: “We focus on the retail end in terms of providing the full suite of retail experiences to our customers. This is why we started to incorporate additional services to build an ecosystem for the end-consumer, such as workshops, warranty services, in-house loans, car insurance and rental.”
He continues: “As Carsome has built the supply chain really well, this is something that we would be able to learn from them, as we are focused on the different aspects of the supply chain. We are also looking towards implementing this model in the Singapore market.”
While Singapore is not Carsome’s strongest market, it has a presence here, “which actually gives us a lot of opportunities for integration”, says Loo.
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Unsurprisingly, Loo calls the merger a win-win. With the merger, Carsome will use CarTimes’ data — which includes the company’s transaction history — to better understand consumers’ habits, and will leverage CarTimes’ position in Singapore to further penetrate the country’s market.
To Cheng, Carsome’s digital background will help give CarTimes’ traditional setup a boost. “What we can bring to the table is really how to utilise the technology, layer on everything they are doing today, and bring it to the next phase of growth so that it becomes a lot more seamless in the way you think about buying and selling,” he says.
Cheng says: “Utilising data creates insights. Carsome has been a very data-driven business. A lot of the features, solutions that we have generated, are derived from our understanding from the data.
He adds: “It goes without saying that it goes both ways. That we can come in to power the solutions with our data understanding, they can also provide new insights into the data they have gathered within the Singapore market. They help us to also further expand into Singapore where we come in with all the capabilities that we can value-add.”
Following the merger, the growth trajectory for both businesses will be greatly accelerated. Loo says: “We also hope to build a bigger presence. We are strong in Singapore, but we are exploring expansion plans in the region. We have spoken to a few car brands which are regional players, who were already speaking to Carsome. So through Carsome, we’ve had a chance to work on these partnerships with them.”
He continues: “Carsome and CarTimes have been integrating their own individual best business practices with our respective companies, and we are implementing such practices in our joint business processes. Through the merger, Carsome will look at some of our successes and get us to help share our methods with their regional entities.”
Loo adds: “Singapore is a very safe and smart nation. So whatever we do down here, is it replicable in other countries? Singapore is very good for branding. So if we bring our brand and our expertise over, I think we can inject our experience.”
Loo points out that CarTimes’ staff morale has been high since the merger announcement because it is no longer just a Singapore company.
“[Thanks to the merger], we definitely have a bigger data team, bigger IT team, and we can learn from them,” he says. “So we are very excited moving forward.”
Co-branding, same family
On the new co-branding, Cheng says: “The whole idea is, how can we empower them to do more? Ultimately, we are all within the same family.”
Within Carsome itself, there are other businesses, including WapCar, which is one of the largest automotive content portals in Malaysia, Indonesia, Thailand and the Philippines; and iCarAsia, the biggest car classified platform in Malaysia, Indonesia and Thailand.
What’s ahead for CarTimes? Cheng says: “CarTimes will be the main operating arm [in Singapore] because it’s already a very well-known brand, it has established trust with the customers.”
He continues: “Simply, what we’re doing here is to utilise what we have learned so far from the other markets, and bring it to CarTimes. So how we are serving customers is very much with CarTimes, but you know, powered by CarSome,” he adds.
In terms of growth and branding as a merged entity, Cheng hopes to grow the business within the Singapore market and possibly into the region as well.
“I think first and foremost, [the merged entity] should really reflect this capability into what customers could enjoy. And ultimately, that would help us to also create more efficiencies within the business of CarTimes. On top of that, customers will now be able to have a lot more understanding in how they think about buying or selling cars,” he adds.
Cheng says: “So it’s a lot more data-driven, a lot more technology is going to be implemented. And a lot of this, I think, would help CarTimes to really grow even further for the next couple of years.”
Carsome, in April, was reportedly in talks to conduct a dual listing on the Nasdaq and the Singapore Exchange (SGX), a move which would value the group at US$2 billion. In June, the company was said to be delaying its listing plans.
When asked about its plans for listing in Singapore, Cheng says: “What we [Carsome and CarTimes] are currently exploring is how can we partner better with SGX, [and are] having more conversations on how we can collaborate with SGX.”
