Cazoo’s collapse is being blamed on the limited potential for online-only motor retail, according to research from July’s Startline Used Car Tracker,
Additionally, 37% believed investors overestimated the efficiencies that technology could provide, and 35% felt that investors failed to recognise that existing dealers were already adept at selling online.
Moreover, 34% cited poor timing of Cazoo’s launch due to the pandemic, 23% pointed to existing retailers improving their game in response to Cazoo and other online-only entrants, and another 23% felt that Cazoo underestimated the strength of established dealers.
Paul Burgess, CEO at Startline Motor Finance, commenting, said: “The trajectory of Cazoo has been closely monitored by nearly everyone in car retail as it was arguably the most ambitious and certainly the best-funded of the new online-only dealers. It’s intriguing to see what others in the sector believe led to the business’s failure.
“Our research indicates a mix of circumstances and a general misreading of the market by investors. Dealers think that while the impact of Covid was unpredictable, the potential for online-only retail and new technology was overestimated, and the strengths of existing dealers were underestimated.
“Perhaps the most interesting finding is that almost a quarter of dealers say Cazoo’s arrival spurred others in the market to enhance their online offerings. So, despite its ultimate failure, Cazoo may have positively impacted the sector.”
The Startline Used Car Tracker, compiled monthly for Startline Motor Finance by APD Global Research, surveyed 307 consumers and 62 dealers.