Continental Auto Exports — Business Model
CAE employs a cost-plus pricing methodology calibrated against US import market benchmarks. The base pricing formula incorporates vehicle acquisition cost (in ZAR, converted at hedged USD rates), compliance modification costs, logistics costs, insurance, and a target gross margin of 20%. Pricing is…
Section 5 · Business Plan
Business Model
CAE employs a cost-plus pricing methodology calibrated against US import market benchmarks. The base pricing formula incorporates vehicle acquisition cost (in ZAR, converted at hedged USD rates), compliance modification costs, logistics costs, insurance, and a target gross margin of 20%. Pricing is…
5.1 Revenue Streams
| Revenue Stream | Description | % of Revenue | Growth Profile |
|---|---|---|---|
| Vehicle Sales | Sale of new and CPO vehicles to US buyers | 85–90% | Volume-driven |
| Logistics Fees | Freight management and coordination charges | 5–8% | Per-unit fee |
| Compliance Fees | DOT/EPA modification and certification charges | 3–5% | Per-unit fee |
| Ancillary Services | Warranty facilitation, finance referral commissions | 2–3% | Emerging |
5.2 Pricing Strategy
CAE employs a cost-plus pricing methodology calibrated against US import market benchmarks. The base pricing formula incorporates vehicle acquisition cost (in ZAR, converted at hedged USD rates), compliance modification costs, logistics costs, insurance, and a target gross margin of 20%. Pricing is periodically benchmarked against comparable US-listed vehicles to ensure competitiveness.
5.2.1 Unit Economics (Illustrative)
| Component | Amount (USD) | % of Selling Price |
|---|---|---|
| Vehicle Acquisition Cost | 18,000 | 72.0% |
| Compliance Modifications | 1,200 | 4.8% |
| Logistics (SA to US port) | 2,000 | 8.0% |
| Insurance & Documentation | 800 | 3.2% |
| Total Cost of Sale | 22,000 | 88.0% |
| Selling Price | 25,000 | 100.0% |
| Gross Margin per Unit | 3,000 | 12.0%–25.0% |
Note: The illustrative unit economics above represent a mid-range vehicle. Actual margins vary by vehicle category, with luxury and specialty vehicles commanding higher absolute margins.
5.3 Sales Channels
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Direct B2B Contracts: Long-term supply agreements with US dealership groups, providing volume visibility and working capital predictability
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Digital B2B Marketplace: Proprietary online platform enabling US-based dealers to browse available inventory, request quotes, and place orders
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Strategic Partnerships: Formal partnership agreements with established US import specialists, leveraging their distribution networks and market knowledge
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Trade Show Presence: Active participation in SEMA, NADA, and other key automotive trade events to build relationships and brand awareness
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