Leak reveals Cazoo boss wants to be ‘strong number two’ in used car ad space

  • Staff asked Cazoo boss Paul Whitehead if firm really can take on Auto Trader on call
  • Boss said he thinks former used car dealer will try to become a ‘strong number two’
  • Cazoo said last week it would be halting the sale of used cars and transitioning to a marketplace

Time 8:36 am, March 11, 2024

Failed used car dealer Cazoo has told staff that it does not plan to compete with Auto Trader in the advertising space – but instead become a ‘strong number two’.

During an ‘all hands’ call with employees last week, the contents of which have been leaked to Car Dealer, staff asked if it was really possible for the firm to ‘take on the might of Auto Trader’.

The troubled used car dealer last week shocked the industry with the news it was planning to halt the sale of used cars completely and ‘transition’ to being a marketplace.

During the staff call, CEO Paul Whitehead – who told investors last week he would be stepping down from his role at the end of March – was quizzed by employees.

Staff now expect customer and preparation centres to close, while a number of other support function departments are under the threat of redundancy.

More meetings are scheduled with staff this week where details will be announced on the changes, but for now Cazoo employees have been told it is ‘business as usual’.

A staff member, who wished to remain anonymous, told Car Dealer: ‘CEO Paul Whitehead hosted an all hands meeting where he went over the reasons behind the decision and opened up a Q&A session for employees. 

‘This didn’t prove to be very helpful as most answers were simply around the fact we’d know more next week after meetings between the company and employee representatives.

‘When asked “can we really compete with Auto Trader?” during the Q&A, Paul responded with the fact the intention is not to compete with Auto Trader. 

Subscribe to the Car Dealer weekly briefing

‘He asked us to look at other sectors such as property where there’s a strong number one and then usually a strong number two and three. With our traffic and car buying aspects they believe there is space in the UK market for a strong number two.’

Cazoo will face stiff competition – the market is already saturated with firms working hard to compete with Auto Trader including the recently-rebranded Motors, CarGurus and Heycar among others.

At last week’s Car Dealer Live, participants were asked in a show of hands by Big Motoring World’s Peter Waddell if they planned to advertise on Cazoo. No hands were raised.

One Car Dealer boss at the event said: ‘They’d have to pay me to put my stock on their site after what they said about the motor trade.’

Appearing on the latest Car Dealer Podcast (listen above), Auto Trader’s COO Catherine Faiers spoke about Cazoo’s transition to being a rival. 

She said: ‘In terms of what it means for us and the industry more broadly, we have learned over many years of experience that it takes a lot of investment and a lot of hard work over many many years not just to build a brand but to sustain a brand and evolve a marketplace proposition.

‘I feel that starting from the position [Cazoo] are starting from, it won’t be that they can’t make it work or make it happen, it’s just that it is hard and is not without its need for investment.

‘You need stability, you need a good tech team, you need a big brand that you keep investing in, you need lots of capabilities that they will have to build on – so it feels like a long journey for them to win the trust of dealers and make the investment required to make a success of that.’

Faiers also told the podcast she wasn’t surprised the firm will be moving away from selling cars.

She added: ‘It felt inevitable for some time – they were quite clearly running out of cash and they had to do something as the current situation was not sustainable.

‘If cash is the priority then unwinding the stock, bringing it back to the assets that are still of value and aren’t hugely capital intensive and don’t need loads more money, makes sense as a step. So I am not surprised they have bought it back to the brand.’

Cazoo declined to comment further when approached by Car Dealer.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

More stories...

MFL Advert
Server 108