11:26 am, March 1, 2021
Swansway director Peter Smyth has given his frank opinion on online used car dealership Cazoo in an exclusive Car Dealer Podcast.
Smyth joined the Podcast team on Friday and explained how Cazoo boss Alex Chesterman had already caused his business to up its game digitally.
‘He’s definitely been a disruptor and I must say I watch avidly what he is doing,’ said Smyth.
‘It’s caused us to up our game digitally. Covid has caused us to up our game digitally and in fairness to Mr Chesterman he has also caused us to up our game too.’
Smyth was speaking to the Car Dealer Podcast in the same week as it was revealed that Chesterman had reportedly sold £100m worth of shares in the used car retailer.
Newspaper reports claimed the founder, who also launched Zoopla, had cashed out in a funding round last September ahead of a rumoured flotation for the business that could value it at £5bn.
In a forthright chat during the Podcast, Smyth gives his opinion on Cazoo’s reported stock turn, its valuation and compares the business to listed used car supermarket Motorpoint.
He says the listed supermarket currently has a market cap of £252m – and is a ‘very similar business’ to Cazoo, but turns its stock far quicker.
‘They [Motorpoint] turn their stock 10 times,’ says Smyth.
‘This business, used cars, is all about stock turn. You don’t get emotional about why you haven’t sold a beautiful car. It’s a case of how long has it been here because we need to see the back of it.
‘You need to get your money back in. The most profitable used car businesses have great stock turn. That rule has never changed.’
Smyth says rival online used car dealer Carzam is the one he is watching carefully and says he likes the fact it is run by ‘motor dealers who know what they’re doing’.
He added: ‘What is the difference between Carzam and Cazoo? I’m sure Mr Waddell doesn’t think he’s worth five billion pounds.’
As the motor trade begins handing over 21-plate cars to March customers today, Smyth says he is aiming for around 70 per cent of normal business this month.
He said: ‘The manufacturers we deal with have been very fair, some more so than others, but I do believe that the OEMs want some form of March to happen.
‘Now that might not be the barnstorming numbers we’d usually have in March, but they do want some form of March to happen.
‘There are a group of people in the trade who also think they can ignore March and then when they can open in April, April will be the new March.
‘I don’t share that view and think there is still good business to be done in March.’
Smyth said he thinks 70 per cent of normal sales in March at Swansway would be a ‘very good result’.
He added: ‘You aim for the sky, you hit the ceiling, you aim for the ceiling you fall flat on your face as a football manager once said.
‘The thing we do is that we don’t mention lockdown, we’re not shackled by it, it’s a case of trading has changed so we don’t mention the “L” word.’
Among other topics, Smyth also talks about Peugeot’s new logo and what it will mean to dealerships as it is rolled out at dealerships across the country.
The Car Dealer Podcast, which comes out every Friday, is available on all good Podcast platforms, including Apple Podcasts and Spotify. Search for ‘Car Dealer Podcast’ to listen to it now.
