Tesco – new cars next?

If things continue as they are doing, then the UK will gradually turn into a country of Tescos, car parks for the Tescos – and ‘other stuff’!

It seems there’s no end to the supermarket giant’s plans to meet all or shopping needs – and I mean all. From groceries to electricals, clothes and even banking and insurance, it’s all under on roof.

“What’s all this got to do with cars?” you may be thinking.

As far as new car offers are concerned, the answer is “nothing”. But perhaps we should add “yet” to that.

Let me explain…

The sheer size and financial power of Tesco means it can really displace whole markets. And last April, Tesco moved boldly into the second hand car market, with the launch of Tesco Cars, and a plan to offer RAC-inspected used cars at anything up to 20% less than average forecourt prices.

The company brings together buyers and sellers and the cars are delivered directly from seller to buyer, with no showrooms, overheads and commissions, etc. (other than Tesco’s middle man margin of course).

Tesco aimed to sell 3,000 cars a week in the short term, rising to 5,000 longer term. This hasn’t quite happened, but it is already hitting 2,000 cars per week, with stock turned over once a week on average.

And the company has the power to buy big and buy cheaply in the ex-fleet market. At the moment, it is on selling cars at around a 9% discount (less than the 20% less than average it is aiming for). But it’s making progress, that much is clear.

As things stand, Tesco is kind of a hybrid sitting somewhere between traditional new and used car sellers on the forecourt, and the simple principle of putting buyers and sellers in touch via paid for ads. But how long will it be, if things continue and the venture is successful, before the supermarket giant decides to shake up the new car market with its sheer size and buying power? Watch this space!