Online retail experience reshaping vehicle sales and processes in Europe

27 October 2021

Europe’s €400 billion used-car market is thriving and online car retailers such as Auto1 and Cazoo are taking advantage of this upward trend. Both companies have recently opened up new sales channels, putting strategic development at the heart of their operations. Their digitally-oriented business models have proven to be a success, emphasising the online boom in used-car sales.

Auto1 is a German used-car platform active in 30 countries, with revenues hitting the €2.8 billion mark in 2020. The company has received plenty of attention since going public earlier this year and operates several brands focused on buying and selling cars online. It works with around 60,000 dealers in Europe and has just announced the expansion of its partnership with Volvo.

This will give registered Volvo dealers in Germany the opportunity to digitally evaluate trade-ins more easily via Auto1’s app while dealers also have access to remarketing services. The process will then allow Volvo dealers to digitise vehicles for a Europe-wide auction. At the same time, Auto1 gains another sourcing channel that strengthens its digital-platform offering.

Digitising the market

‘By partnering with Volvo, we are establishing a purchasing channel that will enrich our network. As a result, even more high-quality trade-ins and leasing returns will be available on our platforms,’ said Jost Dieckhaus, VP remarketing Europe at Auto1 Group.

‘In addition, we are expanding our cooperation with authorised dealers and making our remarketing technologies available to car dealerships throughout Germany and Europe. The aim is to digitise sales and purchase processes. Our logistics solutions complete the holistic service offering so that car dealerships can fully focus their time and resources on their core business that is important to them.’

Online used-car retailing promises transparency and ease of use. Its impact on the automotive industry should not be underestimated as it can drive stronger leads, appealing to both dealerships and consumers looking to buy a vehicle. While it might not be industry standard yet, businesses such as Auto1 are market drivers, and one company that has garnered as much attention is UK-based online group Cazoo.

Growing product offerings

Like Auto1, Cazoo has made a name for itself in Europe and is one of the fastest-growing businesses in the region, having only launched in 2018. The company aims to make buying and selling vehicles as simple as possible. At the beginning of the year, the group acquired German car-subscription provider Cluno, looking to expand its car-as-a-service (CaaS) offering.

It seems the company is going on an acquisition spree as it recently announced it will purchase Vans365 – an independent online commercial-vehicle retailer in the UK – for £6.5 million (€7.7 million) in cash. The deal underlines Cazoo’s ambitious plan to grow its online retail services further while also speeding up its launch into buying and selling commercial vehicles.

‘The market for commercial vehicles is worth £16 billion annually, with over one million vans sold each year in the UK, which expands our addressable market and is a natural product extension for us,’ said Alex Chesterman, founder and CEO of Cazoo. ‘The acquisition of Vans365 will accelerate our planned launch of buying and selling commercial vehicles online later this year and will enhance both our customer proposition and team.’

Cazoo owns and fully reconditions all vehicles before selling them. Auto1’s retail arm has also recently opened a ‘production centre’ dedicated to the reconditioning process. Both companies have not only tapped into Europe’s highly-fragmented, used-car market, but they have also fuelled its growth.

While they are not the only key players in Europe – Britain’s Constellation Automotive Group recently acquired a Dutch rival in a megadeal – their growth strategies exemplify how digital transactions are transforming the European used-car market. Their presence underlines an important trend, one that sees other European used-car retailers increasingly moving online.