Bricks vs clicks: New car dealers open amid digital sales doubts

Coincidentally, as the results of the online car buying surveys were released, Cazoo, a major online-only used car retailer, closed its vehicle refurbishment centre in Westbury, Wiltshire, one of its seven such centres. Cazoo plans to reduce their number to three as it continues a major cost-cutting exercise designed to stem huge losses at the company, which has predicted it will sell around 45,000 cars in 2023 compared with 65,000 the previous year. To help steer it to profitability, Cazoo has recruited leading automotive executive Jonathan Dunkley, a former CEO of CarShop and board member of the Sytner Group, in the role of chief operating officer. 

Sakar said his appointment is a step in the right direction. "Dunkley will bring valuable motor industry experience to Cazoo. The company's founders are great disruptors but underestimated the industry's ability to quickly adapt to challenges."

He points to Cinch, notable for its sports sponsorships, as one of the few online-only retailers with a chance of succeeding in the digital space. "It's a different ball game with Cinch. It's owned by Constellation, which also owns British Car Auctions, Webuyanycar.com and Marshall Motor Group, a major car retailer. Crucially, this gives Cinch a supply of used vehicles, a serious challenge for similar businesses. Is the online market sustainable? I think Cinch stands a better chance than most of making a success of it." Rowles agrees, saying: "Cinch has the end-to-end supply chain sorted." Their words will be a comfort to Cinch's executives, this year working to reverse a pre-tax loss of £149 million in 2021/2022. 

Meanwhile, at Big Motoring World, Peter Waddell – who understands more than most the perils of online-only retailing having, as co-founder of Carzam, been forced to put the company into voluntary receivership in 2022 – is busily adapting to the challenges posed by online retailers. These include purchasing up to 70 vans required for the firm's vehicle purchasing and collection service – from, of all companies, Cazoo. In the competitive world of motor retailing, one sector's loss is another's gain.

Interview: Mark Carpenter, CEO, Motorpoint

How many cars will you sell this year?

"We'll sell 60,000 cars to retail customers and a further 40,000 to wholesale buyers."

How many cars do you plan to sell from your new Ipswich site?

"In the first year, around 1000 and more as the branch establishes itself."

Do you plan to open more branches?

"We're always looking for new opportunities. Where one of our branches opens, we grow the zero to four-year car market and force other dealers to be more competitive."

What is the average age and price of the cars you sell?

"We're a nearly new car supermarket so none of our cars is more than four years old. Their average price is £23,000."

Where does your stock come from?

"From multiple sources including customers, auctions, leasing companies and manufacturers."

How have you adapted to the emergence of online-only retailers?

"By offering the same service, as well as physically at our branches. In fact, 60% of our customers reserve their car online before coming to us to see and try it. We deliver, too."