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Meet Sujay Tyle of Frontier Car Group

This is an extract of the article published on the blog of AIM Group and written by Bryn Blum.

When Sujay Tyle was thinking about how to build up Frontier Car Group, his new automotive marketplace, he didn’t want it to be in the U.S. or Europe.

A year ago, Tyle, originally from the U.S., moved to Berlin to launch Frontier Car Group with partners André Kussmann, the former director of engineering at Auto1 in Berlin, and Peter Lindholm, an investment manager at Millicom who helped Rocket Internet grow its global operations and strategy.

They decided to focus on six markets and, since then, have raised $36 million U.S., establishing operations in Nigeria, Pakistan, Turkey, Chile, Indonesia, and Mexico.

“The automotive sales sector has traditionally proved flawed in every country,” he told the AIM Group. “Despite growing consumer demand, there has been a lack of a centralized, trustworthy marketplace for people to buy and sell cars efficiently at good prices.”

Frontier Car Group is essentially a brick and mortar company empowered by technology, Tyle explains. “We set up hundreds of small inspection stations — like a gas station — throughout the countries where we operate and tell customers they can sell their cars in under 45 minutes to a pool of verified buyers — car dealers — whom we have assembled. It’s a similar model to Germany’s Auto1.”

(...)
 
What unique challenges do you face in your market?
Tyle: Building a used-car marketplace in developing countries is very capital intensive. Although the dollars needed are lower, access to capital is limited. There are very few global investment firms in Pakistan, for example. We are attacking these challenges by doing live auctions to reduce working capital needs and by leveraging our being a global company to access funds.

There is also macro volatility in emerging markets. Ramadan falls in a different month every year, which introduces sometimes unforeseen seasonality. That, in turn, impacts where we spend our marketing dollars. Regional issues, such as the referendum in Pakistan last April, also affect growth. Being present in different countries helps us to reduce these seasonality effects.

Finally, customers from different countries have distinct preferences. So we made the decision to localize much of our operations at the country level, which is very different than the way Rocket Internet operates, for instance. The way we think about selling cars is different in each location. However, we also leverage the synergies of centralizing a few areas of our business, such as product, engineering, and online marketing – all of which are highly technical.

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