CAR Group's Sustainable Growth: Evaluating the Durability of a 112% Three-Year Return and Future Catalysts

The CAR Group (ASX:CAR) has delivered a staggering 112% total return over the past three years, driven by a combination of strategic digital transformation, market expansion, and operational efficiency. As investors assess the durability of this performance and potential for continued outperformance, a closer examination of the company's financial trajectory, growth drivers, and forward-looking initiatives reveals a compelling case for long-term value creation.

Financial Performance: A Foundation of Consistent Growth

CAR Group's financial results from 2021 to 2025 underscore its ability to scale revenue and profitability at an exceptional rate. Revenue surged from AU$449 million in 2021 to AU$1,183.856 million in 2025, while net income grew from AU$137 million to AU$275.489 million during the same period CAR Group Limited (ASX:CAR) FY25 Financial Results and …^[1]. This growth has been underpinned by a stable profit margin of 23%, reflecting disciplined cost management and pricing power in its core automotive marketplace CAR Group Limited (ASX:CAR) FY25 Financial Results and …^[1].

The company's proforma metrics further highlight its resilience. In 2025, proforma revenue rose 12% to AU$1,144 million, and adjusted net profit increased by 10% to AU$377.016 million CAR Group Limited (ASX:CAR) FY25 Financial Results and …^[1]. These figures, coupled with FY24 results showing 17% proforma revenue growth to $1.1 billion and EBITDA growth of 17% to $581 million CAR : Annual Report FY24^[2], demonstrate a consistent ability to outperform industry benchmarks.

Digital Transformation: The Engine of Scalability

A key catalyst for CAR Group's success has been its aggressive digitization of the car-buying journey. The 2023 annual report emphasized strategic investments in reducing friction points for consumers, such as re-platforming retail websites and launching proprietary tools like Bello (a vehicle valuation tool) and C2C payments CAR Group Full Year 2025 Earnings: Revenues Beat Expectations, …^[3]. These innovations not only enhanced user experience but also drove transactional growth, with C2C payments exceeding AU$100 million in total value CAR Group Full Year 2025 Earnings: Revenues Beat Expectations, …^[3].

The exit from the tyres business in 2025 further illustrates the company's focus on core competencies. By consolidating resources into its digital marketplace, CAR Group has strengthened its position in a sector where 62% of consumers are now prioritizing sustainability and digital convenience New automotive industry trends in 2024 and beyond^[4].

Industry Trends: Aligning with the Future of Mobility

CAR Group's growth is not solely a function of internal strategy but also a reflection of broader industry shifts. The global automotive sector is undergoing a seismic transformation driven by electric vehicles (EVs), shared mobility, and connected technologies.

1. Electric Vehicles (EVs): With 42% of consumers expressing interest in EVs as their next vehicle New automotive industry trends in 2024 and beyond^[4], CAR Group's digital platforms are well-positioned to capitalize on this trend. Emerging markets like China, where one in four cars sold in 2023 was electric, further validate the long-term potential of this segment New automotive industry trends in 2024 and beyond^[4].
2. Shared Mobility: The rise of on-demand and shared mobility solutions—projected to expand revenue pools by $1.5 trillion by 2030 New automotive industry trends in 2024 and beyond^[4]—aligns with CAR Group's diversification into services such as vehicle-as-a-service (VaaS). This shift is particularly relevant in urban markets, where ownership models are evolving New automotive industry trends in 2024 and beyond^[4].
3. Connected Technologies: The market for connected vehicle technologies is expected to reach USD 568 billion by 2035 New automotive industry trends in 2024 and beyond^[4], with CAR Group's digital infrastructure already generating ancillary revenue streams through features like real-time pricing and financing tools.

Sustainability and ESG: A Competitive Advantage

CAR Group's commitment to sustainability has also become a differentiator. The company achieved carbon neutrality across its global operations in 2024 CAR : Annual Report FY24^[2], a critical factor as ESG criteria increasingly influence investor and consumer decisions. Additionally, its recognition as a “Great Place to Work” (with 86% of employees recommending the company) underscores its ability to attract talent and maintain operational stability CAR : Annual Report FY24^[2].

Future Outlook: Catalysts for Continued Outperformance

Looking ahead, CAR Group has set ambitious targets for 2026, including proforma revenue growth of 8–12% and EBITDA growth of 9–13% CAR Group Limited (ASX:CAR) FY25 Financial Results and …^[1]. These goals are supported by:
- Global Expansion: Strong performance in markets like Brazil, South Korea, and Chile CAR : Annual Report FY24^[2] positions the company to benefit from emerging economies' projected 2025–2035 growth New automotive industry trends in 2024 and beyond^[4].
- Strategic Acquisitions: The FY24 annual report highlights successful M&A activity, which has expanded its digital vehicle marketplace footprint CAR : Annual Report FY24^[2].
- Product Innovation: Proprietary tools like Bello and C2C payments are expected to drive recurring revenue and customer retention.

Conclusion: A Model of Sustainable Growth

CAR Group's 112% three-year return is not a flash in the pan but a reflection of its ability to adapt to technological and consumer trends while maintaining operational discipline. By leveraging digital transformation, aligning with EV and shared mobility trends, and prioritizing sustainability, the company has built a durable competitive moat. For investors, the combination of proforma growth targets, expanding market opportunities, and a robust EBITDA margin suggests that CAR Group is well-positioned to continue outperforming in the years ahead.