06 Aug 2024
Limited potential for online-only motor retail was the top reason for the recent collapse of Cazoo, dealers believe.
Research from July’s Startline Used Car Tracker shows half of dealers surveyed said this was a problem, followed by 37% who said investors overestimated efficiencies that could be accessed through technology, and 35% that they failed to recognise that existing dealers were already good at selling online.
Also, 34% said the timing of the launch of the business was poor because of the pandemic, 23% of respondents felt that existing retailers raised their game in reaction to Cazoo and other online-only market entrants, and 23% that Cazoo underestimated the strength of existing dealers.
Paul Burgess, CEO at Startline Motor Finance, said: “The trajectory of Cazoo has been watched very carefully by almost everyone working in car retail as probably the most ambitious and certainly the best-funded of the new online-only dealers. It’s therefore interesting to look at what others in the sector think lies behind the failure of the business.
“The picture suggested by our research suggests there was a mixture of circumstances and a general misreading of the market by investors. Dealers believe that while the impact of Covid could not be foreseen, the market for online-only retail and the potential for new technology were overestimated, and the strengths of existing dealers were underestimated.
“Perhaps the most interesting single response is that almost a quarter of dealers say the arrival of Cazoo caused others in the market to improve their online proposition. So, while the business may ultimately have been a failure, it has been arguably good for the sector.”
The Startline Used Car Tracker is compiled monthly for Startline Motor Finance by APD Global Research, well-known in the motor industry for their business intelligence reporting and customer experience programs. This time, 307 consumers and 62 dealers were questioned.