OmniCar adjusts its strategy: Stronger focus on lucrative car dealer segment
While OmniCar’s long-term goal remains the same, the company has decided to turn its strategic focus to authorised car dealers, car importers and large workshop chains. Additionally, OmniCar introduces its Service Agreement Management (SAM) solution in three different packages and price levels, ranging from a monthly license fee from SEK 395 to SEK 3,295 and an onboarding fee of up to SEK 13,000. The 5% commission fee to OmniCar will discontinue.
OmniCar’s Service Agreement Management solution has been on the market since the end of 2017 and the company has now gained the necessary insights into the pricing structure and the ability for OmniCar customers to incorporate the SAM solution and sell service contracts to its customers. With the insights in mind, OmniCar has decided to revise its target group for 2018. OmniCar will now primarily focus on authorised car dealers, car importers and large workshop chains. Independent workshops will be offered a self-onboarding solution.
OmniCar’s segment of car dealers has shown extremely strong performance with a higher than average service contract revenue, longer subscription terms and an average of over 100 contracts in 1H 2018 alone. The segment has generated over SEK 18 million in service agreement revenue in 2018 on OmniCar’s solution. In contrast, the customer base of small and medium-sized workshops has proven much slower in generating the expected turnover.
“For many workshops it is a new routine selling service agreements and this behaviour takes longer time to adapt to compared to car dealers. Consequently, we see a slower adaption compared to our expectations and with a business model that is based on a 5% fee to OmniCar, this business model would in the long run impact our revenue”, Claus T. Hansen says.
Higher license fee
OmniCar has found that car dealers see the SAM solution as a must-have and they show a willingness to pay a higher license fee compared to the current 5% commission. This effects OmniCar positively as the company is paid from day 1 of the contract if car dealers already have a large portfolio of service contracts.
“In addition, we have experienced increasing demand from car importers, and since the matureness of our SAM solution is ready to meet the requirements of the enterprise market, we are confident that we can address this segment as well. More specifically, we estimate adding 250 car dealers to our platform in the remaining four months of 2018”, Claus T. Hansen says.
By the end of 2018, OmniCar will have a total of 700 dealers, equivalent to a recurrent monthly license revenue of SEK 1.5 million. This number is expected to grow to SEK 4 million by the end of 2019.
“Our ambition of reaching SEK 100 million in revenue remains the same, but with this change in price structure, our confidence level is firmer. Another upside is that our business model is much more transparent and easier to understand for our shareholders,” Claus T. Hansen says.
Contact Information
For more information about OmniCar Holding AB, please contact
Claus T. Hansen, CEO
E-mail: cth@omnicar.dk
Telephone: + 41 79 854 47 69
http://www.omnicar.com/
About OmniCar Holding AB
OmniCar Holding AB (559113-3987) OmniCar is a 100% ‘plug-and-play’ online solution. No more time-consuming management and manual invoicing. OmniCar allows you to manage your service agreements digitally with a layout that is fully customised to meet your business’s individual requirements and specifications. You save time and administrative resources thanks to the automated system management of all processes.