CarTrade Tech Ltd. is planning to shut down the auto sales division on OLX India. The reason for this has been said to be the bad economics of the unit.
It is noteworthy that about four months ago, Sobek Auto, a 100% subsidiary of CarTrade Tech Limited, acquired the auto business of OLX India. This deal was done in July for Rs 537 crore.
What did CarTrade say?
“Sobek Auto India has taken a strategic decision to discontinue C2B operations in the auto transaction business”, CarTrade said. This will reduce employee and other administrative expenses. The possibility of working with other players will also be explored.”
Sobek will continue to run its classifieds advertising business, which is OLX India’s largest business.
More Read
The company said that Sobek’s classified business is profitable and shows tremendous potential for growth in the future. The classifieds business has immense potential for growth and value creation, which is why Sobek has decided to focus its energy and resources on it.”
OLX closed auto business in many countries
It is noteworthy that in July, Cartrade had bought Sobek Auto India for Rs 537 crore. Sobek has everything in OLX India. Sobek has followed OLX-owned company Prosus in shutting down its auto business.
Prosus took the strategic decision to exit the OLX auto business in several countries. This resulted in the company closing its factories in Argentina, Mexico and Colombia, furloughing 800 employees.
Shares of CarTrade Tech were trading 3.07% higher at 12:06 PM on NSE. In comparison, the benchmark NSE Nifty 50 declined by 0.28%.
