The sad demise of Autoquake demonstrates how difficult car retailing is and that having specialist used car experience and skill is clearly a pre-requisite for the job. Although it is inevitable that cars will in some shape or form eventually be sold purely on line, it is still a long way from being the silver bullet some people think it is, simply because of the sheer complexity of ensuring that car buyers get the experience coupled with the deal and the right car for their money.
Companies selling their goods via the internet continue to attract more willing customers and the amount we spend per year is ever increasing but when someone is spending thousands of pounds the necessity to touch fell and test is an absolute must. Expecting customers to miss out the middle bit and go straight to the handover and payment has proved to be a bridge too far.
Of course the failure of Autoquake may also be linked to the economic downturn. Whilst more experienced and robust car retailers especially franchised and specialist dealers have managed to continue to source retailable stock despite a dearth of product for the last few years, this may ultimately have caused problems for Autoquake. As any car dealer will tell you selling the cars is the relatively easy bit. It is pretty straightforward to get your preparation, presentation and marketing standards right but finding the stock to sell with a margin in them is the hard bit.
The continuing success of specialist re-marketers such as BCA and Manheim has meant that Autoquake have just not had access to cheaper retailable stock. Rental companies looking to re-market their own cars employ specialists to do that for them leaving a company like Autoquake in a position where they just couldn’t make it work.
Autoquake wanted to cut out the middle men and offer better deals as a result of not having showrooms just collection centres, but their downfall has been as a result of not being able to get the right cars at the right price.
Speaking to Motor Trader Magazine, BCA communications director Tony Gannon said: “The retail and wholesale markets are quite different from one another and the existing business models based on retailing through dealerships and wholesaling via auction and other remarketing channels are tried, tested and successful.
“The Autoquake model set out to offer something new by providing an online retail proposition to the consumer for used vehicles sourced direct from the fleet and leasing sector but unfortunately the reality has fallen short of the vision.”
Our understanding is that their idea was to retail ex-fleet and rental cars and pay for them only when they were sold but as soon as the rental/fleet companies found they could get the same or better money from the more traditional channels (and instant payment) the Autoquake venture was doomed to failure.
It seems in the long run that Autoquake were not skilled or experienced enough in the used car sector or had enough contacts to successfully challenge traditional retailers. This could pave the way for a manufacturer backed online retailer or, as has been rumoured even Tesco, to seize the initiative.
Lack of experience added to lack of the right priced product to sell coupled with a completely different way of selling and challenging customer behaviour equals a sadly inevitable outcome.
Pros and cons for the Autoquake model
Web interface was slick and user friendly
The process was fairly straightforward and easy to follow
The imagery and video of the vehicles was first class as was the marketing
The presentation was very confidence inspiring to customers
The found a niche in the web space and had a vision for the future of car retailing
Not enough variation in stock
Prices weren’t competitive enough
Lack of flexibility in customer needs
Lack of real used car expertise
Difficulty in sourcing stock at the right price
Not taking advantage fully of the millions of annual hits by monetising the site better
Started their blog too late and didn’t take advantage of the space they were in
Didn’t take part exchanges maybe should have sought out strategic partnerships with other specialist car buyers or developed their own system massive lost opportunities to remarket these cars
Tried too hard to apply a tried and tested e-commerce template to car retailing
There was not enough profit in the cars to be competitive