7:19 am, May 15, 2024
Sytner is set to axe its CarShop used car supermarket brand following a strategic review of the business, it has been confirmed.
CarShop staff were told yesterday that the business – the Car Dealer Top 100’s second most profitable dealer group in the UK – would be ‘shifting its focus’.
At least one site has been earmarked for closure while some of the others could be repurposed as Sytner Select Approved Used Cars superstores.
In a statement, Sytner also confirmed it was in advanced talks to sell a proportion of the stores to another party as a going concern.
Sytner currently operates CarShop stores in Bristol, Cardiff, Doncaster, Manchester, Northampton, Norwich, Nottingham, Sheffield, Swindon, Warrington and Wolverhampton. The firm recently rebranded its Wakefield CarShop site as Sytner Select.
A spokesperson for Sytner told Car Dealer: ‘We can confirm that after conducting a strategic review, including a successful pilot at one former CarShop location, the group is consulting with our CarShop team regarding the potential rebranding of the majority of our CarShop locations, to become Sytner Select Approved Used Cars superstores.
‘In addition, we can confirm that we are also in advanced negotiations with an interested party to sell a minority of the CarShop locations as a going concern, as well as potentially closing one location.
‘Our priority, as always, will be to protect as many jobs as possible whilst ensuring that the long-term future success of the business is secured.’
Staff told Car Dealer that they were told a number of roles could be at risk as a result of the changes. The company has not commented on the extent of job losses that may occur as a result of the move.
Sytner bought CarShop for more than £70m in 2017 and in 2021 rolled out the CarShop brand across the globe.
Sytner is owned by the New York Stock Exchange-listed business Penske Automotive and the firm uses the CarShop brand in America, too.
Last year, Penske revenue topped £23bn and it made profits of £863.5m. The UK contributed 31.3% to Penske’s revenue in 2023 while the CarShop outlets in both the UK and US were static, adding 7% to the total.
Wholesale changes
Sytner’s move follows a glut of changes to the large format used car supermarket model in the UK, which has seen others exit that area of the market.
The largest casualty has been failed online-only used car dealer Cazoo, which earlier this year ‘pivoted’ to become a used car marketplace after its disastrous run of selling cars came to an end. Last week, it told investors it intended to appoint administrators.
Pendragon’s new owner Lithia confirmed last month that hundreds of staff would lose their jobs after it took the decision to kill off its CarStore used car supermarket brand. It blamed a ‘collapse in supply of used cars’ as the cause as all 16 of its CarStore sites were earmarked for closure.
That followed Peter Vardy closing his Carz used car supermarkets last year. He also blamed used car supply issues and the fall in used electric car demand. In addition, Inchcape closed eight of its 17 Bravoauto used car supermarkets late last year.
Steve Young, managing director of the automotive research specialists ICDP, said CarShop was effectively ‘the last man standing’.
He told Car Dealer this morning: ‘I think there is a common thread in that these standalone stores are relatively high fixed-cost and succeed-or-fail on the back of their used car business, whereas a traditional franchised dealer point has new, used and aftersales so has some natural risk-hedging built in.
‘With the dip in three-to-four-year-old used cars now working through from Covid times, the availability on these cars is restricted.
‘At the same time, the manufacturers have returned to their traditional ways in terms of new car supply, so the price on a three-year-old car can’t rise too far to match limited supply because it then looks expensive in terms of monthly payments compared to a new car with manufacturer support in the finance deal.
‘Clearly the supply issues will work through over the next three years, but that’s a long time to carry those high fixed costs. That longer-term structural adaptation has therefore been accelerated by the supply restrictions.’
In December 2020, Car Dealer visited the firm’s then recently renovated Nottingham CarShop store and met boss Nigel Hurley. You can watch a video of that visit below.
