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Tesco Cars business model meant 'failure was inevitable'

Tesco Cars was asking major dealer groups for used car stock less than a month into its launch 12 months ago.

The business, effectively a fleet-to-consumer online car broker closed at the start of April after revealing it experienced early problems with not being able to offer customers a satisfactory range of ex-fleet car stock from leasing companies and the Motability charity.

Grant Thornton is now handling the sale of Tesco Cars’ assets including its online sales platform, as the companies behind it – Auto Online and Carsite – have gone into administration.

But will another challenger attempt to forgo car retailing without a physical premises, offering test drives or part exchanges?

If anything, failures of the past from Virgin Cars, to Autoquake and now Tesco Cars may prove a warning to non-automotive businesses looking to become motor retail pioneers.

Dealers have told AM that without a basic grasp of how to manage used car stock, an automotive retail business is always destined to fail.

Response from the industry

Robert Forrester, Vertu Motors chief executive, told AM: “A lot of people will try and come in and take bits of value out of the relationship between manufacturers and dealers.

“But dealers have a key resource, namely stock.

"The writing was on the wall for Tesco Cars within one month of launch when it asked major dealer groups for our stock. Failure was inevitable.”

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  • DavidJones - 03/05/2012 09:07

    I agree that without stock to touch and view online used car operations stuggle I have always believed that possetion(ie stock)is 90% of a sale "this can be your car by the weekend"is the best close, same can be said for certain manufacturers used stock locators why sell some other dealers stock? switch sell to yours,the principal of used car dealings is "buy as cheap as possible, sell as dear as possible and turn stock as often as possible and treat used cars as cash!"

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