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Autoquake goes into administration

Online used car retailer Autoquake has gone into administration.

MCR has been appointed as administrators as of March 17 and are trying to find parties interested in purchasing assets of the company.

Dermot Halpin, Autoquake chief executive, has refused to comment while the administration process is ongoing.

Halpin told AM: "Part of the administration process is the sale of various company assets, there is a lot of trade and other interest in the technology platform. MCR wants to get that completed before we make press statements."

Autoquake was launched in 2005 and has customer hand over centres in London and Leeds.

The company secured £6 million in venture capital and venture debt financing in March 2010.

The equity was provided by existing investors Accel Partners and Highland Capital Partners and the debt was provided by Kreos Capital.

Industry comment

Manheim described Autoquake’s business model as “somewhat naïve”.

Mike Pilkington, managing director of Manheim’s Remarketing division, said: “It’s always highly regrettable when any remarketing supplier fails but, however prominent Autoquake had become as a specialist quasi-retail sales channel, their business model was always going to be a challenging one.

“In fact, when they first launched their proposition over five years ago, backed by the first of three substantial tranches of venture capital funding, we expressed our views then about the difficulties they would encounter.

“Autoquake claimed at the time they would be successful by ‘taking a link out of the value chain’ and, by that, they meant removing the need for wholesale remarketing.

“We felt this was somewhat naïve, as success in today’s competitive market is driven through a proposition which offers speed to market through a choice of physical and online sales channels, coupled to an infrastructure providing logistics, inspections, reconditioning, vehicle imaging and preparation. Then it’s about generating highest value by marketing vehicles to the most appropriate buyers from within the massive buyer database, which Manheim for example maintains.”

Chris Hayden, Ford Retail chairman and chief executive, said that tapping into the internet market requires a lot of motor trade experience which he felt Autoquake lacked.

Tony Gannon, BCA’s communications director, said: "The retail and wholesale markets are quite different from one another and the existing business models based on retailing through dealerships and wholesaling via auction and other remarketing channels are tried, tested and successful.

"The Autoquake model set out to offer something new by providing an online retail proposition to the consumer for used vehicles sourced direct from the fleet and leasing sector but unfortunately the reality has fallen short of the vision."

In reaction to Autoquake going into administration, its competitor Carsite took the opportunity to say it was confident its business model was stable and “has a proven track record going back 10 years”.

A Carsite statement said: “Naturally, we’re sorry to see the difficulties of any motor retail business.

“We have long standing relationships with our supplier partners because we understand their business, pressure points and requirements. We have developed the business model together. The net result is a proven supplementary route to market which delivers genuine, improved returns.”

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