At a time when the residential estate agency industry is in a period of self-assessment about its working models and adjusting to the new normal of the Covid-crisis, this story from the world of secondhand car sales is interesting, especially as it concerns the well-known figure of Alex Chesterman, the serial, and mostly highly successful, entrepreneur who founded Zoopla.

There may be lessons for estate agency in Chesterman’s recent change of direction in his new business, away from online and in to ‘traditional’ physical locations.

Cardealermagazine.co.uk is reporting that Chesterman’s latest venture,  the previously online-only car dealer, Cazoo – has been accused of making a ‘huge u-turn’ as it moves away from selling cars purely online to set up physical sites.

Cazoo has so far raised more than £200m from investors with a promise to ‘revolutionise the car buying process’ with its ‘disruptive’ model.

The company, which was recently valued at £800m, is apparently now setting up physical sites around the UK.

Cazoo bought Imperial Car Supermarkets in July. It is thought the acquisition was made to get its hands on stock and to cherry-pick physical sites to become ‘handover centres’.

The move away from online and into physical sites is said to have come after Chesterman baulked at the preparation costs he was being charged by external companies to ready cars for sale and the realisation that some customers still want to visit dealerships.

One car-dealer boss is reported as saying:

‘It’s a huge u-turn. For months Cazoo have been saying online is the future, but here they are buying a car supermarket group and doing what we all do.’

Automotive business investor Bruce Beaton – who holds a number of dealer groups in his portfolio – told Car Dealer he believes Cazoo’s £800m valuation is ‘ludicrous’.

“I can’t believe it was in their plan to invest in bricks – so basically a failure. The one to watch is Carzam who are taking an already slick operation digital with a relatively slim organisation.

“Cazoo didn’t get any of my investment. With every crowdfund the investment diminishes. The claimed value at £800m is ludicrous as it is clearly burning cash and indications are that they will require even more investment.

“The structure of directors, experience managers, data managers is endless and unsustainable. Zoopla never owned an estate agent.”

Read the Car Dealer article here.