B2C digital. Big things are happening in the UK online car sales market. CarGurus, the US leader in used car sales, acquired PistonHeads from Haymarket Media and is working hard to catch runaway leader AutoTrader.
Haymarket CEO Kevin Costello told delegates at this week’s Digital Media Strategies conference in London that his What Car? brand was developing a strategy to chase down CarWow, the UK market leader for new car sales which has revenue of some £18m from sales of 60,000 cars (£300 per car sold by dealers). Whether What Car? (a major magazine-digital information brand in the UK) really can catch the turbo-charged CarWow is open to question, although the smart money may be on Haymarket striking some kind of partnership/joint venture with an existing operator. The potential shifts in car use, ownership, technology, and funding can be scary for established companies.
Meanwhile, Alex Chesterman, the digital Brit who founded Lovefilm (sold to Amazon for £200m in 2011) and the Zoopla property sales platform (sold last year for £2bn), has fund-raised some £30m from backers including the Daily Mail Group (DMGT). It’s all for this Summer’s launch of Cazoo, a site which will let customers buy and rent used cars. It will sell refurbished cars online, deliver them within 48 hours and offer a 7-day free return policy.
Chesterman, along with some of his latest backers, was an early investor in CarWow. He is now planning to buy thousands of cars and a distribution centre. The obvious risk of such operations is in the funding required to hold the stock (something CarWow never has to do, as a sort of lead-gen model).
DMGT was the largest shareholder in Zoopla as well as in UK comparison site Uswitch, and property site Primelocation. The news publisher had a successful track record of such venture funding (starting with Euromoney) decades before it became, well, fashionable.
Cazoo might be expected to test the resilience of the Buy-a-Car online sales operated by Dennis Publishing – and AutoTrader itself. Meanwhile, the increasingly powerful DriveTribe (“part social media, part publishing”), launched by former Top Gear TV star Jeremy Clarkson, is believed to have secured fresh funding after agreeing to slash its lavish budgets. Just in time. Some car brands really are now spending hundreds of thousands of pounds on DriveTribe content marketing because they love its technology, user-immersion and global reach. It might, after all, become the template for all kinds of special interest global networks. Phew.
