9:13 am, November 8, 2022
Cazoo will need to pivot its business model to allow customers to buy cars through dealer group networks in future if it’s to survive.
That’s the view of the Edward Lovett, founder and CEO of the global online auction platform Collecting Cars.
Speaking on the latest episode of the Car Dealer Podcast, Lovett took a swipe at the online used car business Cazoo saying it currently isn’t offering anything different, and the business’s future will be ‘painful journey’ for investors.
Lovett said: ‘Apple recently launched its “pay later” product, which is all funded in-house, and the likes of Klarna and other pay-later services have all had their share prices tank.
‘Now, with Cazoo, yes you purchase the car online as a consumer, but it’s not really an online business – it’s just a car dealer.’
He added: ‘I believe Auto Trader is about to launch its competitive product to Cazoo and I think Cazoo, if they do anything, will need to pivot.
‘They need to use their platform for people to buy cars through the dealer network that already exists, is well funded and very profitable.
‘They’re going up against some very successful and very well run businesses that work and function perfectly well.
‘They need to use their platform, their technology and their marketing skill to rebuild their business model.’
Lovett went on to say: ‘There’s plenty of stories in America at the moment with SPACs (special purpose acquisition company) that have been raised where all the money is being returned to the original investors.
‘The truth is, they [Cazoo] did a SPAC, they have the capital, they had to spend it and, and they probably have gone and spent it with a business model that’s just not working.
‘It’s going be a very painful journey for many of the people that helped it have a market cap of $6bn-plus.’
You can listen to the full podcast on Spotify and Apple Podcasts.
Lovett was discussing Cazoo’s recent sale of its Italian arm with the Car Dealer team, and just one of many headlines that featured on this week’s podcast.
He also chatted about Collecting Cars’ recent sale of a Ferrari Enzo for just over £3.2m in which the firm took nothing from the seller and charges just 0.15 per cent from the buyer – just like it does with all of its sales.
Founded in 2018, the business has grown rapidly to become one of the world’s leading online auction platforms specialising in prestige and exotic cars.
It recently surpassed $400m of sales and is approaching 10,000 cars sold worldwide.
Each week on the Car Dealer Podcast, two of the team go head to head choosing their favourite stories of the week and an industry guest decides which was best.
You can listen to the podcast on Spotify and Apple Podcasts and stream straight to your device.
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