12:46 pm, August 7, 2023
A leading industry expert has issued a damning indictment on Cazoo on the latest episode of the Car Dealer Podcast.
Steve Young, managing director of research and consulting organisation ICDP, said the troubled used car firm had been built on a ‘house of cards’ from the start.
He said the retailer had misread a European used car market which ‘does not exist’ and was now paying the consequences.
Young, who has worked within the motor industry for over four decades, also predicted that Cazoo would no longer be running in five years’ time.
Speaking to hosts James Batchelor and Jon Raey, he said: ‘If you’re Alex Chesterman looking to pocket a million then you’re not going to talk your share price up by saying “we’re going to copy everyone else and bring in some people who understand automotive to to sell used cars through a website in the UK’.
‘Saying “all dealers are dinosaurs no one is tapping into the European used car market” – which by the way doesn’t exist. That, plus the fact that very few people are interested in buying a car new or used entirely online [means] the whole lot was just a house of cards.
‘It was a complete nonsense from day one. What has happened is now everyone has realised that the emperor has no clothes, which is not a good thought!
‘The business was never viable, they overpaid for a load of acquisitions and they thought there was this thing called a European used car market, which was never the case.
‘There is a regional market in Benelux Germany, there’s a regional market around France, South West Germany and so on but there is not a European market.
‘You can move a certain number of cars a long way but you can’t do that all the time and retail customers are not looking at buying cars over huge distances.’
He added: ‘The whole thing was totally ill-conceived and I would like to say the founders go away with their tails between their legs but I’m sure they’re quids in – they’ll have made sure of that.
‘It’s the other people, who were working for Imperial, which was a great business bought by Cazoo. People who thought they were part of something novel and interesting with Drover, those are the guys we should feel sorry for.
‘Customers who bought the cars actually generally seem to be reasonably happy so the customer experience hasn’t been bad. It’s just that there are not enough customers to fund that sort of business.’
Young was speaking after Cazoo its accounts for the first six months of the year. The documents revealed that the firm slashed its losses in the first six months of the year.
That was just one of the stories discussed on this week’s podcast with other topics up for debate including new car registrations, regional car dealerships and job losses at Peter Vardy.
A full list of stories can be found below:
- New car registrations up more than 28% in July, completing one full year of sales growth
- Lookers takeover poised to go ahead after Cinch agrees to better offer
- Peter Vardy used car supermarkets face closure as group signs MG deal
- Troubled used car retailer Cazoo slashes its losses as brutal cost-cutting mission begins to bear fruit
- Jobs axe will fall at family-run Barretts as Citroen and DS showrooms in Canterbury to close
- Volvo sheds all estates and saloons in UK to go SUV-only
You can listen to all episodes of the Car Dealer Podcast on Spotify, or wherever you get your podcasts.
