Volkswagen Financial Services (VWFS) has confirmed it is winding down its Heycar marketplace division.
VWFS, which is Heycar’s majority shareholder, said that the technology and expertise developed by Heycar will be rolled into a new subsidiary in a “strategic move that underscores VWFS UK’s commitment to innovation and enhancing our technological capabilities”.
A spokesperson for VWFS said: “Heycar has been a pioneer in the online used car marketplace and, despite the decision to wind down their operations, the valuable insights and digital solutions developed so far will play a crucial role in the future of VWFS UK, as we continue to explore new ways to drive growth and innovation in the automotive e-commerce space.”
VWFS refused to comment on when the Heycar business will be closed, but AM understands it will be before the end of the summer.
Heycar had been through a restructuring process in a “ruthless” drive to deliver profitability back in January 2023.
The company was launched back in 2017 in Berlin with the backing of VWFS, Daimler Mobility and Volkswagen.
Heycar expanded to the UK in 2019 to act as a market disruptor against established rivals.
Daimler decided to sell its shares in Heycar a few years later in 2023.
Originally launching in the UK as classified marketplace, Heycar since launched an e-commerce option for customers.
The RAC partnered with Heycar last year in a bid to relaunch the platform in a five year deal.
At the time, Alex Grime, chief of staff at Heycar, said: “We’re delighted to be partnering with the RAC, one of the most trusted and loved brands in the UK.
“With our all-new platform, we will be providing a compelling level of vehicle choice and a modern car buying experience for consumers, while for our automotive retailers, the RAC Cars site will help extend the reach of their vehicles to a high quality audience of in-market car buyers.”
The online classifieds marketplace segment in the UK is congested and other brands like Auto Trader and Motors are competing for dealers’ marketing spend.
Auto Trader is still the market leader in the UK, but rival Motors announced that it would be using the Cazoo brand name and its network of brands to challenge that position in the coming months and years.
Meanwhile Auto Trader is expanding its position not just as a marketplace, but as a technology provider to dealers with its artificial intelligence (AI) powered Co Driver tools.