Dealers: Cazoo and Cinch Are Your ‘Biggest Challenge’

Auto Trader boss Nathan Coe has been talking to Car Dealer mag with a hard-hitting, forthright and – we feel – highly accurate message that traditional car dealerships as we know them are facing a big challenge if they can stand up to the major online retailers such as Cazoo and Cinch.

Of course, the people behind Cazoo et al deliberately set out to change the way people buy cars, so we should not be surprised that the market is shifting. 

Coe does offer a glimpse of a brighter future, saying that the new wave of retailers are ‘breaking down geographic boundaries’.  But the underlying message seems to be that dealerships that do not adapt will simply be left behind by a more savvy, online-focussed buying public.

Is this news?  Well, to anyone who has paid attention to the wider state of the market with even a casual interest this will not be a surprise.

The key, says Coe, is making the buying and selling of a car easier.  Again, we go back to Alex Chesterman at Cazoo whose success is built on that premise.  He and his rivals have changed the game and we have to follow their rules.

Coe said to Car Dealer mag: “These operators, whether it’s the specific ones, or as a general group, are not going away and the experience that they’re offering to consumers is good.

“Retailers, I do think, will find these (online) retailers breaking down the geographic boundaries that have historically defined automotive retailing and you will find these players selling in your backyard or right next to your forecourt.

“That means you all of a sudden do need to provide an experience where people can do more of the process online – otherwise they’ll just go somewhere else where they can – and we obviously as Auto Trader are trying to help that be a reality – but all of a sudden you’re competing with an experience that’s going to feel very customer centric.”

Cazoo is a special case.  Its New York Stock Exchange floatation raised a barrel-load of funds but it continues to make a loss, while also expanding by buying other businesses.

Coe says that Cazoo is nimble and responsive:  “They sort out issues quickly, they’ve got promises around the condition of the car and the availability of the car, it just does change the playing field quite dramatically.”