10:53 am, December 30, 2020
Peter Vardy is to launch an online used car business to rival the likes of Cazoo and Carzam as he ends his partnership with Vauxhall to concentrate on second hand vehicles.
The new ‘Carz’ used car brand will be rolled out from January 1 with a rebranding of two of the group’s existing used car supermarkets and then all six of the group’s Vauxhall franchises will close and become Carz stores too.
Using the group’s in-house online car sales solution Silver Bullet, Vardy says that some 42 per cent of his sales are already made online in some way.
‘Around 30 per cent of the cars we sell are sold purely online where no interaction has been made with a dealership,’ Vardy exclusively told Car Dealer.
‘Another 12 per cent did most of it online and then came into a store to finish the deal off. So we’re making great inroads with online sales already.’
In 2020, Vardy sold 17,500 used cars, but under the new Carz strategy is aiming to increase this to 48,000 by 2023.
‘We’re fortunate in that we have funding, we have a good footprint of dealerships and when we exit the Vauxhall franchise we will have access to 80 per cent of the Scottish population,’ he said.
Vardy explained he and Vauxhall decided to ‘mutually part’ a year and half ago and the dealerships in Aberdeen, Dalgety Bay, Edinburgh, Kirkcaldy, Motherwell and Perth will become Carz used car supermarkets from July 1.
He has doubled his marketing spend for the next 12 months and will pump £8m into promoting the Carz brand.
This will include a ‘major sports sponsorship’ deal which he claims will be ‘the biggest in Scotland’.
Vardy is also investing heavily in used car stock and he aims to have £75m worth of used cars for sale in the group.
His Glasgow preparation centre is already working 24 hours a day, seven days a week preparing 1,500 used cars a month for sale. And there are plans to increase this further.
48,000
Number of used cars Carz hopes to sell by 2023
‘We have good access to vehicles for sale and if you can buy them right, prep them correctly you can do well,’ he said.
Vardy will also be targeting the north east of England with the Carz business and offering home delivery to buyers in this area.
‘It’s been interesting to watch the other online used car businesses launch, but I have been planning this for some time and we’ll do our talking on the pitch,’ Vardy said.
‘I exited the Vauxhall franchises with this plan in mind and this will give me the dealerships to turn into hand over centres and operate as dealers too. We had a great long term partnership with Vauxhall but our plans going forward didn’t align.
‘We’ll be offering home delivery and the option for buyers to come into dealerships to complete the deal.
‘We were doing online used car retailing anyway – this is just a way to ramp that up and really take it to the next level.’
Vardy has already launched a new transport division to manage the logistics of home deliveries for the group.
And the firm will be searching for premises to operate as a standalone ecommerce centre in the second quarter of 2021.
Vardy was one of Vauxhall’s biggest partners in Scotland, but the brand has been going through a transformation that has seen it reduce its market share and cut its dealer network.
Vardy says the exit was ‘mutual and managed’ and will see him move away from volume new car sales to focus on used and prestige marques. Vardy will continue its partnerships with BMW, Porsche and Jaguar Land Rover.
The successful car dealer group – which this week announced profits of £11.3m for 2019 – has also launched ‘Goodbye car’, his rival to We Buy Any Car.
‘We hope to buy 1,000 cars a month via Goodbye Car and we’ll be a rival to We Buy Any Car with it,’ says Vardy.
‘We are fortunate in that we have access to money and instead of going out there and buying 10 new dealerships we’re going to buy 10 dealerships’ worth of used stock instead.’
The Carz brand will launch online on January 1 and will see the group’s CarStore name disappear. It will use a distinctive Gulf-like orange and light blue colour scheme.
Vardy added: ‘We have been working on this growth strategy for some time, however the events of this year have meant we have fast tracked these plans.
‘There has been a significantly increased level of demand for used vehicles which along with challenges around the supply of new vehicles and with Brexit potentially making this even harder it makes sense to move our plans forward.’
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