Tesco has pulled out of the online secondhand car market, closing its motors website a year after it was launched.
Tesco Cars closed to new business as of yesterday. Visitors to the website are now met with a message informing them of the closure, and that no more orders are now being taken. Customers with outstanding orders are directed to the company’s customer service advisers.
An on-site customer Q&A panel answers the question of why Tesco has taken the move. “We started Tesco Cars in good faith,” reads the answer, “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.”
According to reports, the site had been selling only 150 cars a month. A year ago, as it launched the business, Tesco said it would bring "better service, value and convenience to the used car market," with a service designed not to add to the 'tens of thousands' of complaints that consumers were making to Consumer Direct about the used car market. Twelve months on, it seems that mission has failed.
The closure comes weeks after Tesco boss Phil Clarke took personal control of the supermarket group’s UK business, after the departure of its UK business chief Richard Brasher.
It also comes as Tesco’s food business replaces its long-standing Tesco Value range with Tesco Everyday Value, replacing its basic range with what it says will be better quality products.
David Wood, Tesco UK marketing director said: “Tesco was the first supermarket to launch a Value range back in 1993, the blue-and-white striped brand giving customers a down-to-earth option.
“Almost 20 years on and an affordable quality range is more relevant than ever, but customer needs have changed.
“We have listened closely to what our customers want and Everyday Value will provide products that taste better, look better and are healthier – still at the same great price.”
Our view: When Tesco launched its car-selling venture at this time last year, we said that the supermarket was taking a gamble that consumers are ready to buy cars online and in enough volume to make it worth doing. “Tesco is better that its brand together with the checks and guarantees that it promises will inspire enough trust in consumers that they will spend thousands on a car they haven’t seen,” we said.
It’s only in recent years that consumers have proved willing to buy high value items such as cars online in numbers that make it worth retailers’ while. Tesco is betting that its brand together with the checks and guarantees that it promises will inspire enough trust in consumers that they will spend thousands on a car they haven’t seen. It will be interesting to see how that works out.