8:19 am, July 18, 2024
Cazoo was a ‘complete and utter disaster from the moment it was an idea’.
That is according to UHY Hacker Young boss David Kendrick who has described the amount of money lost by the failed used car dealer as ‘scandalous’.
Appearing on the latest episode of the Car Dealer Podcast, the mergers and acquisitions expert said investors into the company had been ‘naive’ to back the outfit so strongly.
Kendrick was speaking to podcast hosts James Baggott and Jon Reay about Motors launching the new Cazoo app, but talk inevitably soon turned to the outfit’s controversial past.
‘I think it was a complete and utter disaster from the moment it became an idea,’ he said. ‘I’m not going to lie, myself and many of our clients and friends in the industry all looked at it and thought, “what on earth is this about?”.
‘People have tried this before and it’s failed. Consumers like touching and feeling cars. How do you deliver cars nationally when you’ve only got a £1,000 margin in it at the best?
‘I think they got really, really enthused because they were making £800 a unit in Covid times but everybody else was making three, four, five grand a unit.
‘They had all this stock that they forgot depreciated in normal times. How that money was allowed to be burnt at the rate it was burned is quite frankly scandalous. Now you can say the investors were naive and it was their own stupid fault.
‘It’s really scary. One thing they’ve done is they’ve built a very, very well known brand because it’s been on every single sports team and sports channel and everywhere you go, there’s something Cazoo isn’t there?
‘I always said at the end, what will be left is a very well known brand and someone will pick that up. I actually thought one of the dealer groups might have picked it up and used it as an online brand maybe.’
Despite the failure of Cazoo, Kendrick believes there is a space in the motor trade for pure online car buying. However, he says the market for the model is too small to be viable at the level Cazoo was aiming for.
He is now backing Motors to make a success of the company, following its acquisition last month.
Kendrick added: ‘I guess there’s some people who have probably had good experiences of the whole Cazoo thing.
‘One of my friends bought their son a car on it and they just said it was dead easy. There is a place for that in the market, absolutely, but I don’t think there’s enough of a place for it.
‘I guess it’s perfect for Motors when you look at what they’re trying to do. I don’t know how much they’ve paid for it, but I guess it wasn’t a huge amount, so actually it’s just an extension to their brand portfolio.’
The Car Dealer Podcast, sponsored by JATO, sees an industry guest join our hosts to discuss the motor trade’s biggest headlines of every week.
You can listen to all episodes of the Car Dealer Podcast on Spotify, or wherever you get your podcasts.
