Caltex and Carbar turn service stations into car yards

Michael Bailey
Nov 14 2018
AFR
Caltex is turning its service station forecourts into car sales and rental yards as an antidote to flat sales of fuel.
The fuel and convenience retailer hopes buying or hiring a car will become another reason for people to visit its sites, alongside a new fresh food offering, parcel pick-up and discounted petrol or Red Bull for Uber drivers, as it prepares for a future of electric cars and declining vehicle ownership.
“Mobility is changing, and we need to keep up,” said Caltex’s head of convenience retail, Richard Pearson.
Under a trial running at Caltex’s South Yarra site, people wishing to sell their car can simply drive it into the parking lot and hand over the keys to a Caltex staffer.
The vehicle is then picked up and driven away for inspection by a representative of Carbar, a start-up that graduated from Caltex’s Spark accelerator program earlier this year. A licensed motor trader, Carbar has already pre-approved the vehicle based on details uploaded to its app.
If everything checks out, Carbar deposits the pre-agreed price into the vendor’s bank account. It then drives the car back to the servo to be on-sold, or hired by a customer of its separate pay-by-the-month car subscription service.
The cost of this convenience to the vendor is a price about 10 per cent to 15 per cent less than they could get selling their vehicle themselves, admitted Carbar co-founder Des Hang.
“But that involves strangers turning up to your house, and not everyone’s comfortable with that,” he said.
“You could also drive it around the dealerships and hope one will buy it. But with us it’s a guaranteed sale once the pre-approved details are confirmed, and the servo is there to take the car 24/7.”
The upside for Caltex is foot traffic in an era where even by its own forecasts, fuel sales will be flat over the next five years as more efficient engines and declining levels of car ownership among Millennials take their toll.
Mr Hang said “about 30” cars had been sold from the South Yarra Caltex since the trial started last month, with dozens more people visiting to test drive cars, or swap vehicles as customers of Carbar’s subscription service.
This service allows cars to be hired for a month at a time, at $150 a week for a basic sedan up to $400 a week for a BMW 3 Series, with all costs covered bar tolls and petrol. Caltex throws in a $200 “Star” card to first-time hirers and offers a 4¢ per litre fuel discount to all subscribers.
“Millennials are putting everything else on subscription so why not their car?” Mr Hang said.
The service has a modest 50-odd concurrent subscribers at the moment.
However, Mr Pearson said the trial of Carbar sales and hires from the Punt Road site had been working “pretty well”. Mr Hang said it was about to be expanded to three other Caltex service stations in Melbourne, with all 1900 Australian locations on the radar.