Knowing Cazoo In Detail

Cazoo’s portfolio has a wide range of used cars, be it high-end brands like Audi, Land Rover, BMW, and Mercedes-Benz or common names like Ford, Kia, Nissan and Volkswagen.

Cazoo’s ‘Car Finance’ programme helps its customers to tailor their vehicle finance plans as per their household budgets and then go for the used car fitting in that bill. The buyers can select the vehicles, apply for finance, pay their monthly deposits and complete the paperwork, all online, following which the cars will be delivered either to their doorsteps or they can receive the vehicles from ‘Cazoo Customer Centres’.

Their ‘Car Finance’ programme has two solutions, Hire Purchase (the buyer can spread the car cost by making monthly payments over an agreed term) and Personal Contract Purchase (the buyer can make equal monthly payments over an agreed term. After the contract ends, he/she can decide on whether to hand the car back to the lender or change it for another one/buy the vehicle with an ‘optional final payment’).

Cazoo’s ‘Car Finance’ programme has been drawn in collaboration with European lending giants like Black Horse, Santander and Evolution.

The start-up’s ‘Car Care’ programme covers areas such as warranty extension, thorough car servicing and paint and fabric protection.

For those planning to sell cars, Cazoo states on its website, “You can drop your car off at your nearest Customer Centre for free and in as little as 48 hours, or we can pick the car up from your door with prices starting from £149. The pick-up fee will be deducted from the value of your car. Cars that are valued at £25,000 or more must be dropped off at a Customer Centre for processing due to their value.”

Not Every Vehicle Meets Cazoo’s High Standards

Cazoo doesn’t buy first-hand vehicles which have issues identified by a car history check, contain damages, stolen/scrapped, have mileage discrepancies, lack legal tyres, and have been used for rental and authority purposes/driving lessons. Also, 15-year-old cars, along with the ones with insurance issues and modified automobile parts, are not preferred either.

Cazoo’s Maintenance Check Involves
• To recondition the used cars before handing them over to the customers
• After reconditioning, it displays detailed images of the car on its website
• Cazoo technicians test drive every used car to check its engine performance, steering, brakes and other engineering parameters, before handing them over to the customers
• Executing oil and filter changes on every car with less than three months to go before its next service and listing for sales
• Valet the cars and thoroughly sanitise them before handing them over to the customers, while ensuring the vehicles are having 10 litres of fuel (or 75% of charge, in the case of an electric vehicle) during the deliveries
• During delivery, Cazoo also provides a 90-day warranty and RAC roadside assistance for these used cars
• Its ‘7-Day Money Back Guarantee’ gives the customers a week’s time to drive up to 250 miles, in order to know and get acquainted with the car. Cazoo’s customer care also gets in touch with the customers during the same timeframe to get feedback

Latest Developments Around Cazoo

The company, launched in December 2019, was valued at USD 7 billion (over £5.2 billion) when it was listed on the New York Stock Exchange in August 2021. However, it is facing a market test right now.

In June 2022, the company stated its intention to cut costs by £200 million by 2023 end, which would result in around 750 job cuts.

Cazoo has removed 15 of its 22 used car handover centres from its website, as part of its business restructuring. It has already withdrawn from the European market, apart from axing its car subscription services and selling its Cazana used car data business.

It intends to retail 40,000 to 50,000 used cars in 2023, in order to achieve profitability after delivering 65,000 sales in 2022, down on its earlier 100,000 unit target. Cazoo’s revenues in 2022 had risen to £1.25 billion from £668 million in 2021. The start-up won’t raise additional capital in the next two years, as it ended 2022 with a balance sheet of over £250 million of cash and other assets.

However, Cazoo is showing signs of a rebound in 2023, as its founder and CEO Alex Chesterman commented, “Our January and February retail sales volumes and revenues were in line with expectations and, as we focus on unit economics, we continue to notably improve our retail GPU which is tracking at ~£900 so far this year, up from ~£600 in Q4 2022. The fact that we have now sold well over 100,000 cars entirely online in the UK in the three years since launch demonstrates the continued consumer shift online as they embrace the transparency and convenience of our market-leading digital used car buying and selling experience.”

Jonathan Dunkley, a 20-year veteran in the used car industry, who was working as a strategic advisor to Cazoo since 2021, has been appointed as the company’s Chief Operating Officer, as the business now eyes ending 2023 with over £100 million of assets in its balance sheet.

Image Credits: Cazoo

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According to the company statement made on June 4, these cars might have compromised braking systems.

The company will contact the owners of the vehicles and recall 993,407 vehicles, including 70,000 in Germany.

It is not the first time this issue has arisen. In 2021, Mercedes recalled a similar number of cars over a safety issue with the emergency call system. This system helps alert emergency services of an accident and transmits the vehicle’s location. The Mercedes call system began relaying the wrong vehicle location to emergency services. According to the European Union, the eCall system has been mandatory for all the cars sold since 2018.

The recall affects vehicles built between 2004 and 2015. They are from the ML and GL series of SUVs and R-Class luxury minivans. The process to rectify this issue would involve inspecting the faulty vehicles and replacing the parts if needed.

Mercedes said that they found the function of the brake boosters in these cars could have been affected by advanced corrosion in the joint area of the housing.

The company has further asked its customers not to drive their vehicles until inspection.

The company also plans to launch a new entry-level electric vehicle architecture by 2024. It will be called the Mercedes Modular Architecture (MMA).

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Mercedes-Benz luxury SUV portfolio comprising the GLA, GLC, GLE, GLC Coupe, GLE Coupe and the GLS grew in double digits Q1 2017. The comprehensive SUV portfolio continued to drive growth for Mercedes-Benz as it reiterated its increasing popularity among the Indian customers. While the growth in the SUV portfolio was primarily led by the GLC, which emerged as the highest selling SUV, the bigger GLE, GLE Coupe and the GLS also witnessed strong customer preference in the January-March 2018 period. The luxury sedan segment comprising the C-Class, E-Class and the S-Class performed very well. The all-new Long Wheelbase E-Class continued its sales momentum and sustained the customer interest across markets and supported the growth of the sedan portfolio. The E-Class’ success was closely matched by that of the C-Class Sedan, which remained an important volume contributor in Q1 2018. Apart from the sedans, the New Generation Cars continued to attract younger customers to the brand, while the AMG and Dream Cars portfolio made the fascination for the brand more visible than before.

Roland Folger, Managing Director & CEO, Mercedes-Benz India commented, “2018 began with a positive note for the brand, though the spike in Q1 sales can be attributed to the advancement of sales due to the impending price correction, triggered primarily by the increase in basic custom’s duty. It might be a challenge to sustain this momentum in the coming quarters and we are cautiously optimistic. As the luxury industry volumes are comparatively low, the focus should remain on helping the industry grow by creating demand. A rise in demand would translate in increased production and thus, lead to significant revenue generation, and would support the ‘Make in India’ initiative.”

Mr Folger added: “We are extremely excited to witness the strong performance of our mainstay models, the C-, E-, S-Class and the SUVs. Particularly the success of the Long Wheelbase E-Class underlines the aptness of our decision to launch the car in India. We will continue with our product offensive and introduce a host of new products across segments and body shapes, to keep the consumer’s interest. Qualitative expansion in our network spread, coupled with service differentiation driven by our cost of ownership measures and availability of tailor made financial programmes, will continue to add value to our efforts of creating delightful customer experience. It is assuring to witness growth across the portfolio which reiterates that luxury car buyers’ in India continues to appreciate our ‘Best Keeps Leading’ initiatives.”

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Mercedes Benz, the subsidiary of Daimler, quoted Dalai Lama in one of their Instagram posts on Monday. The advertisement showcased a car with the words: “Look at situations from all angles, and you will become more open.”

The company apologised on Tuesday for the first time on one of China’s one of the top social media platform called Weibo.

Although China has no access to Instagram, but the post went viral as Chinese internet users started reposting it and that created a lot of turmoils.

Xinhua, the official news agency of People Republic of China, said that the car manufacturer in a letter had apologised to China’s ambassador in Germany and stated that the company didn’t make the post to raise any controversy about Beijing’s sovereignty over Tibet. The company also stated that it provides ‘no support, assistance, aid or help to anyone who intentionally subverts or attempts to subvert China’s sovereignty and territorial integrity’.

The letter added saying: “Daimler deeply regrets the hurt and grief that its negligent and insensitive mistake has caused to the Chinese people. Daimler fully and unreservedly recognises the seriousness of the situation, which the company has caused and sincerely apologises for.”

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Luxury companies are of opinion that with the implementation of the Budget and new duty rates, prices may jump by USD $1,560- 15,600 (Rs 1-10 lakhs).

However, deals at pre-Budget prices are available for existing stocks at dealerships. Car companies like Mercedes-Benz and Audi have already started offering ‘pre-Budget deals’ to their potential buyers. Increased prices are expected to be announced over the next few weeks, after companies clear inventories and fresh imports arrive or get assembled.

A soar in prices will be expectedly announced in the next couple of weeks when luxury car manufacturers clear their existing stock and new stock of cars and parts arrive.

Silver Arrows, one of the dealers for Mercedes-Benz in Delhi-NCR, has approached its probable buyers saying: “Hurry and buy your favourite car at pre-Budget prices, till stocks last. Prices will likely increase by 5%.”

A senior functionary with Mercedes said, “This is the right time to buy, as prices are yet to change. We are also doing aggressive follow-ups with customers.”

Mikey Todd, one of the top dealers for Audi in India, said that there are chances that the price of the brand may raise by 3-4 percent in the new stock. He also added: “It depends on model-to-model, but this is the kind of inventory that we hold.”

“People are still absorbing the fact that prices are going up. In any case, there have been quite a few instances of unexpected rush this fiscal, especially due to duty and price changes at the time of GST rollout. That rush is missing.”

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“We are excited to celebrate 20 years of production in Tuscaloosa by expanding our operations in the region and by bringing our electric initiative to the United States. With this one billion dollar investment, we are significantly growing our manufacturing footprint here in Alabama, while sending a clear message to our customers across the US and around the world: Mercedes-Benz will continue to be on the cutting-edge of electric vehicle development and production,” said Markus Schäfer, Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain. “With production locations for EVs and batteries in Europe, China and, now, the US, our global network is ready for the era of electric vehicles. Thanks to our plant modernization in Tuscaloosa, we will be able to quickly ramp up US production of EQ models, while also being more flexible to our customers’ demands for innovative vehicles that live up to the excellent quality that is synonymous with the Mercedes-Benz brand.”

In addition to the electric initiative, the logistics activities in the US will be expanded with a new Global Logistics Center and a new after-sales North American hub, exporting car-kits to global assembly plants and spare parts from the US and North America to worldwide markets.

“With the addition of electric SUVs to our future fleet, we will provide discerning drivers with a new, high quality automotive option that will marry performance, luxury, and environmental stewardship,” Markus Schäfer said. “As a result of our investments in Alabama, Mercedes-Benz customers will soon be able to enjoy advanced technology coupled with a luxury driving experience.”

The plant in Tuscaloosa exclusively provides worldwide clients with the SUV models GLE, GLS and GLE Coupé that continue the proud tradition of quality associated with Mercedes-Benz. With the upcoming production of the next SUV generation the plant will enhance its proven production portfolio with modern plug-in hybrids, responding flexibly and efficiently to market demand. With the additional integration of electric vehicles, the plant is shaping the future of electric mobility worldwide. The announcement was part of the 20-year celebration at MBUSI. Dignitaries attending the event included Alabama Governor Kay Ellen Ivey as well as other local and state officials.

“This is an exciting day for MBUSI and our entire team here in Alabama,” said Jason Hoff, President and CEO of Mercedes-Benz US International during the “All Team Member” meeting. “Looking back on 20 years of production, the Mercedes-Benz plant in Tuscaloosa has been a success story from the beginning. We are now continuing this story with a clear vision for the era of electric mobility. We are proud that Tuscaloosa will be an integral part of our company’s evolution to electric vehicles contributing to the long-term success of Mercedes-Benz Cars.”

“The fact that Mercedes-Benz continues to expand its operations in Alabama makes a powerful statement about the quality of the global automaker’s workforce in the state, and underscores that we are achieving our goal of ensuring businesses in Alabama don’t just survive, but thrive,” Governor Kay Ivey said. “For the past two decades, MBUSI has been a tremendous partner in the growth of our state, and we look forward to strengthening those bonds in the years to come.”

Tuscaloosa is home to Mercedes-Benz’s SUV production for the world market, having started production of the former M-Class (today the GLE) in 1997. As the first automotive manufacturing location in the State of Alabama, the plant also served as the catalyst for additional OEMs, automotive suppliers and supporting businesses to come to the area, creating thousands of jobs in the region and leading to Alabama’s strong position as one of the key automotive business clusters in the United States. Mercedes-Benz exports more than 70 percent of its SUVs to markets around the globe. With an earlier investment of $1.3 billion announced in 2015, the plant is currently being expanded to prepare for the production of the next SUV generation including plug-in hybrid models. The plant expansion comprises a new Body Shop, major enhancements to the SUV Assembly Shop as well as upgraded logistics and IT systems.

Electric vehicles from the family of EQ branded products

Mercedes-Benz will start producing SUV models of the EQ brand in Tuscaloosa at the beginning of the next decade. EQ models will be integrated into the series production at the plant. This is possible because of the early investments in flexibility and technical equipment at the plant that offer trailblazing Industry 4.0 technologies. With the Tuscaloosa plant, Mercedes-Benz will have electric mobility hubs on three continents serving customers’ demand around the globe.

By 2022, the company will electrify the entire portfolio of Mercedes, offering customers at least one electrified alternative in all segments from smart to large SUVs. The company is planning to offer more than 50 electrified vehicle variants. At the same time, Mercedes-Benz will be continuously supporting the development of plug-in hybrids and the introduction of 48-volt-systems. The first EQ series model, EQC, will go into production in 2019 in Bremen, Germany. Technology and product brand EQ is an integral part of CASE, which stands for the intelligent combination of the strategic pillars of connectivity (Connected), autonomous driving (Autonomous), flexible use (Shared & Services) and electric drive systems (Electric).

Fifth Mercedes-Benz factory to produce batteries

The battery factory near plant Tuscaloosa will be part of the global battery production network of Mercedes-Benz Cars for local demand and export. In total, Daimler will invest $1.18 billion (more than one billion Euros) in the battery production network, which will also include production facilities in Germany and China. As in vehicle production, the battery production network will react flexibly and efficiently to market demand. This strategy ensures the ongoing availability of modern battery technology through local production hubs in Europe, China and the US and puts Mercedes-Benz in a highly competitive position for its electric initiative. Construction work for the new one million square-foot facility in Tuscaloosa is expected to begin in 2018, with operations planned to start at the beginning of the next decade.

Expansion of logistics activities

Expanding its industrial footprint, Mercedes-Benz is also building a new Global Logistics Center and a new after-sales North American hub in Bibb County, five miles from the plant in Tuscaloosa.

The Global Logistics Center will support worldwide logistics operations connected with products “Made in Tuscaloosa” and will supply oversea assembly plants with car-kits, where Mercedes-Benz produces vehicles for local markets. Operations including brand new IT systems to support lean logistics processes in the new warehouse are scheduled to begin in 2019.

Additionally, Mercedes-Benz is consolidating the three existing after-sales warehouses at a new location. The new after-sales North American hub will be co-located with the new Global Logistics Center providing markets abroad with spare parts. This allows the company to meet rising market demands amid the growing variety of models. The new hub is scheduled to start its operations at the end of 2020.

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