Cazoo Latest Exit Signals Trouble In Europe’s Used Car Market
British car market Cazoo sells its German subscription business two years after the purchase.
The decision, which was announced on a Friday (February 17). opinioncomes after the online used car dealer informed investors earlier this year of belt-tightening plans that will involve layoffs and the closure of some of its vehicle detailing plants across Europe to achieve this focus exclusively on the UK market.
The sale of German subscription business Cluno marks the completion of Cazoo’s withdrawal from the European country, with all of the company’s assets being transferred to Stuttgart-based ViveLaCar, another vehicle subscription platform operating in Germany, Austria and the United States Switzerland operates.
Cazoos UK-focused strategy has already led to the sale of its Italian and Spanish businesses and today’s announcement signals the end of the retailer’s dreams of making it big in mainland Europe.
“Following this transaction, Cazoo’s exit, along with previously announced sales of other businesses and assets in Europe, is now largely complete,” the statement said.
Going forward, the UK company is taking cost-saving measures to accelerate its path to profitability without having to raise additional external funds over the next 18 to 24 months.
“We remain focused on further improving our unit economy as we journey there profitabilitywhile remaining one of the fastest growing used car dealerships in the UK,” said CEO Alex Chesterman previously.
EU used car market is struggling
Competition in the European used car market intensified during the pandemic, leading to a surge in online car sales as consumers embraced the convenience of buying and selling used cars online.
But like many industries, the once-booming market has been hit hard by ongoing macroeconomic conditions, even forcing the UK marketplace operator to trim its 2023 sales target to 40,000 retail units this year from 50,000.
Competing companies on the European mainland were not spared either. Last year, Amsterdam-based marketplace operator CarNext closed its operations in the Netherlands after raising 400 million euros ($427.5 million) in new funding. to announce on its website that it has stopped selling used cars to consumers in its home territory.
The Dutch company, which acquired Constellation Automotive Group in October 2021, has also shut down its business-to-consumer (B2C) operations in Italy, Germany, Norway and, more recently, France via each country’s local website, while it maintained its business-to-business (B2B) sales activities.
It remains to be seen what will become of CarNext’s B2C business in Spain and Portugal, where operations appear to be ongoing for the time being.
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