AI poses a genuine medium-term challenge to CAR Group by threatening the economics of online marketplaces rather than the existence of the platform itself. As AI reshapes how consumers search, compare and transact, carsales risks losing some control over traffic flows, facing greater price transparency and seeing the value of leads compress. Over time, that could weaken dealer pricing power and increase customer acquisition costs.
That said, CAR remains well defended. Its scale, deep inventory, strong dealer relationships and vast data advantage create powerful network effects that are difficult to dislodge. The bigger risk is gradual margin and multiple compression, not sudden disruption—and the company’s ability to deploy AI within its own ecosystem will be critical in determining whether it defends or extends its competitive position.
- We believe this is/has been a quality business, but when we think about reducing our tech exposure to reduce portfolio risk, CAR stands out as the position to cut.
We are neutral towards CAR around $26
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