8:40 am, December 24, 2020
When it comes to selling used cars in the future there are two distinct trains of thought as to how buyers will want to purchase.
Some of the new entrants like Cazoo and Carzam are betting big on the new digital frontier, investing in websites that sell direct to the consumer and deliver to their homes.
While there are more traditional players, rolling out bigger and better physical showrooms to sell to customers in a more tried and tested manner.
Used car supermarket group Carshop has just invested millions converting a former flagship Homebase superstore into its latest dealership.
The Sytner-owned used car business has set up the new site in Nottingham, the home town of its parent company and opened the doors just after the second national lockdown.
In an exclusive Car Dealer Live video, which you can watch above, we were given a tour by the used car dealer group’s CEO Nigel Hurley who explains why the company isn’t betting big on the digital sales side of the used car business just yet.
Carshop’s latest store is in Nottingham, the home of parent firm Sytner
Hurley explained: ‘When lockdown happened we lost the opportunity of customers coming in and browsing and to evolve our click and collect process very quickly.
‘It was something we had always done, but finance and part exchange processes was done in store. We couldn’t do that so we had to evolve quickly and allow customers to do that online.
‘There’s room for everyone to take a slice of the market out there. The Carshop approach is that we want to offer any solution to any of the customers’ needs.
‘We’re looking to try and appeal to all of our customers all of the time rather than specialising in one particular niche.’
Car parking spaces are larger than normal so customers feel at ease when they arrive
Hurley says rather than a solely digital process there’s plenty of other ‘low hanging fruit’ to go after and adds some customers still do not feel comfortable buying a car online.
‘We are advancing our technology to be able to offer full online sales, but it’s a race I do not think we need to be at the forefront of,’ added Hurley.
‘We need to be in the race, but we don’t need to be at the front. There’s low hanging fruit to be had while evolving the fully online process. We are in advanced stages already of having that process in place.’
Carshop CEO Nigel Hurley gave Car Dealer a tour
Touring the impressive site, with its highly polished floors and impeccably fitted out customer waiting areas and showroom, it’s clear Carshop believes getting customers in front of its team is still vital.
The dealership offers a drive-in servicing area as well as sales and it’s this combination of selling used cars and servicing them too, on an industrial scale, that helps Sytner record bumper profits from its used car division.
Carshop was snapped up by the American-owned dealer group in 2017 and since then it has been busy integrating the two firms together.
The fit and finish of the Carshop store is impeccable
Clearly the whole process has worked. Sytner finished in second place in the Car Dealer Top 100 list of most profitable car dealers in the UK with revenues of £5.92bn and profit of £152m in 2019.
Hurley tells me that they’ll sell 70,000 used cars a year and the access to the quality stock generated by the new car sales division in Sytner is a key to that success.
Hurley added: ‘We have multiple channels of acquisition. Next year we’ll sell 70,000 used cars and we need to replace those.
‘Quite a lot of those, around 20,000, will come from part exchanges from our own sales in the Sytner Group and I think that gives us an advantage.
Carshop offers servicing too and this new workshop will soon be busy
‘If you think of the portfolio of dealerships Sytner has, the cars they take in are prestige and usually highly specced, one or two owner, well maintained cars.’
The CarShop Nottingham branch is run by head of business Lee Dowell who has been with the group for 12 years, since joining at the age of 19.
He admitted the online car buying experience was evolving and has accelerated since the lockdown.
‘During the second lockdown when we were able to operate under click and collect processes a lot of people were happy to buy more online,’ he said.
Carshop servicing customers can drive into the showroom for comfort
‘Going forward we want to offer a blend of both and get the mix right so those who want to buy from home can and those who want to come into the store can do that too.’
And while the group might have only just thrown open the doors to its latest store in Nottingham, Hurley admits Carshop are already looking to add more showrooms to its 11-dealership strong set-up.
‘We have plans for growth,’ he said. ‘Next year will be 70,000 units but I would like to think we could double that in the next three to four years.’
The huge indoor showroom was converted from a former Homebase store
Those are ambitious numbers, but you wouldn’t put it past the Sytner giants to achieve it.
It’ll be interesting to see in years to come just what the split is between customers visiting these new showrooms like Nottingham, compared to those buying them in their pyjamas from the comfort of the their own homes.
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