Tesco Cars closed after 12 months of trading

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4 April 2012

Tesco Cars has decided to close the business and is no longer accepting orders from customers after a year in business.

A statement from Tesco Cars said: “We started Tesco Cars in good faith and we always aim to do a good job for customers.

“However, following a review of the business model we and Carsite, our partner, have decided that we cannot offer customers a satisfactory range of vehicles and as a result, have decided it is right to close the business.”

A spokesman for Tesco told AM: “The core response from customers was positive, but we had difficulties early on with the supply of stock.

“Given time that problem could have been overcome but Tesco has decided to concentrate on its core business at this time.”

Tesco would not comment on whether the business was making a profit or whether the website could relaunch without the Tesco brand association.

The Tesco Cars model was based on selling ex-fleet stock directly to customers over the internet and was built on Carsite.co.uk’s website infrastructure.

Customers can claim refunds on cars they have pre-ordered and warranties on cars that have already been sold are still valid through The Warranty Group.

Tesco Cars launched in April last year to much fanfare, claiming its access to 16 million Tesco Clubcard holders would allow it access to a significant growth in sales.

When the website first launched, Tesco Cars was advertising up to 3,000 cars each week with models between six months and three years old.

Back in April 2011, Sir Trevor Chinn, chairman of Tesco Cars, said: "When buying a used car, consumers want to know they can trust the information supplied, that they are getting value for money and a good product, all supported by good customer service. Importantly they also want to be able to take their time to make the right purchase for them.

"By marrying these principles, the success of the Tesco brand, and the transparent and unpressured online sales environment, we believe we will be delivering a positive new experience for today’s car buyer."

Comments (5)

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Comments

richardhaith - 04/04/2012 13:05

Should have taken note of the demise of Virgin Cars. Our business is unique and you have to have a heart and soul for it. You can't just jump in and rely on your brand, Tesco...
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chizzy - 04/04/2012 15:03

Quote: Back in April 2011, Sir Trevor Chinn, chairman of Tesco Cars, said: "When buying a used car, consumers want to know they can trust the information supplied, that they are getting value for money and a good product, all supported by good customer service." Clearly you have discovered that many customers are already receiving that and have decided that Tesco were in fact offering not much that was new. Or of course it could be that Tesco couldn't live up to the required standards. The businesses that are best placed to sell ex-Fleet cars to Joe Public are the leasing companies ... it makes you wonder why they don't do more of it themselves.
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Irishboy4 - 05/04/2012 04:58

A surprise to me as two months ago they were cited as having 11% of teh UK used car market. But as Richard states our business is unique and has many contributing factors such as PX's, declined finance props and of course sales people with that special ability to bond and sell!
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Paul Buckner - 05/04/2012 13:28

Tesco ... stick to selling what you know you can sell ... Milk, Bread and Butter and leave the selling of Cars / Commercials to those who know what they are doing AND to the service they give the British public.
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Rough Diamond - 11/04/2012 14:37

Disappointing although not unexpected that Tesco Cars has closed so soon, I can tell you that the Tesco cars business failed because of inept management decisions, and that their owners/directors where simply not accetped in a 'closed shop!' (not Tesco management rather the Carsite management who took on the Tesco Brand, although question marks over those who managed the relationship at Tesco's, the wool firmly pulled over their eyes!). The used car market not only wanted online used vehicle sales, but their is a strong desire from the car leasing community to support this channel. The benefit is two fold; the buyer doesn't have to pay the high dealer margins (win for the consumer, saving circa £800 on a £8K!!!!) and the leasing company gets a higher return than through traditional channels (more money back into some state owned banks etc, CAP return circa 107% over a basket of vehicles!!) So it's only too obvious who losses, and unfortunelty the bank owned leasing companies don't manage their risk as they would any other risk based product, otherwise they would have realised that the day of buyers/sellers travelling up and down the countryside (I won't go down the green route, why because we all have green policies, we just don't enforce/apply them!) to buy and sell used car stock, when they can pay for a team of staff and array of services to sell their 2nd hand cars!!!! and get a lower return!!!!! Tesco Cars have missed a great opportunity with a great brand to make an impact on a sector, that needs shaking up, with obvious benefits and profits, that in reality would only have made those in the 'used car industry' change their prehistoric approach to asset management!! The world has moved on, embraced the internet, but not for USED CARS, come-on Tesco's you have missed a great opportunity circa £3-400 profit / unit x10K units sold / month plus ancillary products!!!!!! I haven't even considered commenting on the customer journey and experience!!
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