9:22 am, July 23, 2024
Cazoo’s failure ultimately benefited the used car sector.
That’s according to motor finance firm Startline following a new poll, which revealed that half of used car dealers believe Cazoo’s limited potential for online-only motor retail was the top reason why it collapsed.
The survey of 62 dealers for Startline Motor Finance’s Used Car Tracker found that 50% of them believed that the restricted potential had been a problem.
Meanwhile, 37% said investors had overestimated efficiencies that could be made via technology, and 35% said Cazoo failed to recognise that existing dealers were already good at selling online.
Thirty-four per cent reckoned the timing of Cazoo’s launch 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% said that Cazoo had underestimated the strength of existing dealers.
Startline Motor Finance CEO Paul Burgess 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 Cazoo brand was sold to Motors for an undisclosed sum towards the end of last month.
You can learn more about Cazoo’s rapid rise and fall here.
Car Dealer also produced a special documentary about the firm, which can be watched below:
