Tesco shuts down used car business

Supermarket closes second-hand car site one year after if launched.

By Andrew McIntyre Published 04 April 2012

Tesco announced on its website today that it is closing its online used car business. Credit: Getty Images

Supermarket giant Tesco has hit the brakes on its online used car site Tesco Cars – a joint venture with Carsite - closing the business after just one year, the company announced on its website today.

Tesco Cars had advertised 3,000 cars a month, but a source told Car Dealer magazine that the company was selling only 150 vehicles monthly by the end of 2011.

The company offered vehicles between six months and three years old, with prices starting at £3,000.

Tesco Cars said on its website:

We started Tesco Cars in good faith 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.

Tesco will be offering full refunds to all customers for whom it cannot fulfil existing orders.

In 2007, the supermarket company launched a property market business offering a home selling service for a flat fee of £199. That venture closed down in the midst of challenges asserting Tesco was acting as a real estate agent and thus had to follow provisions in the 1979 Estate Agents Act.

Last month, Richard Brasher left the company, the fourth board director to do so since Philip Clarke became CEO in 2011.

Tesco had its worst Christmas season in 20 years last December, and shares lost £5bn in January after the company issued a profit warning. Shares are just 15 per cent above their November 2008 lows.

Tesco stock was trading down 1 per cent Wednesday.

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Tags: Tesco used cars

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4 comments

Thu, 2012-10-04 11:28 — Mark Twain (not verified)

Only setting up a business doesn't guarantee you success. One need to fully understand the business. One should get into the minds of people and think as they. Used cars Calgary can be taken as an example. Understanding customer's perspective is very important.

Tue, 2012-07-17 03:44 — J3rrYcid (not verified)

Tesco needs to thoroughly understand the used car business if it wants to succeed in becoming a dominant force in that industry. Just because it has funds to advertise and has a huge stock of used cars means it will easily woo customers over.
Thomas - Carid

Fri, 2012-06-15 02:28 — Alex John (not verified)

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Sat, 2012-06-09 07:23 — randyyusaff

It's been a rumor several years ago that they would come up with such thing. Tesco has been in business for long but a said news they would end that way up. However, i believe it's not yet totally end as there are still Tesco car models out there as well as replacement auto parts that are useful to the public. On the mere side, they are continuously dealing with those stuff which include car Timing Belt Kit, grille guards, bumper covers and even service manuals.