Centurion Motor Exchange Business Plan — Business Model

How the dealership earns at a 12.8% gross margin, and why units and stock turn rather than price drive profit.

Section 10 of 28

Business Model

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Capital is converted into returns through stock turn, not through fixed assets

Key partners

Banks (finance & floor-plan)
Insurer / warranty administrator
Classifieds platforms
Auction houses & fleet lessors
Landlords

Key activities

Buying and appraisal
Inspection & recon
Pricing & listing
Selling & F&I
Stock control

Value proposition

Assured, reconditioned vehicles at market prices
Published inspection report
7-day return, 3-month warranty
Multi-bank finance

Customer relationships

Consultative, fixed-price selling
CRM follow-up at 7, 30, 90 days
Trade-up offers at 36 months

Customer segments

Young professionals
Families
SMEs & tradespeople
Cash & upgrade buyers

Key resources

Two leased sites
Floor-plan facility
Experienced buyers & F&I staff
DMS and pricing data

Channels

Classifieds & website
Social & WhatsApp
Forecourt walk-ins
Referrals

Cost structure

Vehicle cost (c. 86% of retail price)
Recon & goodwill
Payroll & commissions
Rent, marketing, floor-plan interest

Revenue streams

Retail vehicle sales (c. 90% of revenue)
Finance commission, value-added products and documentation fees (c. 3% of revenue, c. 26% of gross profit)
Wholesale disposals (c. 6% of revenue, loss-making)

Table 10.1: From capital to investor returns, FY32 base case

Stage	Measure	FY32 value
Capital	Equity + term debt + asset finance raised	R39.5m
Assets and capabilities	Net PPE + vehicle inventory at year-end	R9.8m + R51.4m
Products	Retail units sold	1,465
Customers	Retail customers (incl. repeat and referral)	1,465 a year
Revenue	Total revenue	R473.7m
EBITDA	After floor-plan interest	R15.4m (3.3%)
Cash flow	Operating cash flow after tax and working capital	R9.2m
Investor returns	Investor share of exit equity at 5.0x EBITDA	R47.8m (1.99x, 18.0% IRR)

Figure 1. 1: Unit economics per retailed vehicle, FY29

Two features define the model. First, gross profit per unit, not revenue, is the operating currency: revenue rises with vehicle prices, but the business earns about R36.4k per car regardless of whether the car costs R180,000 or R320,000. Second, each rand of inventory is 80% bank-funded and turns about eight times a year, so a modest equity contribution to stock supports a large revenue base; the flip side is that stock that stops turning consumes equity quickly.