Tesco Enters Used Car Business

The worldwide general merchandise and grocery retailer Tesco is the third largest on the planet, when measured by revenues. In the UK, it is the leader in grocery markets, with a 30 percent market share.

With its minority interest in carsite.co.uk, the company is now extending its reach in the used car business.

Over last weekend, the site was rebranded to become Tescocars.com. Tesco will run the site under its brand and has the option to purchase the remainder of the stake at a future date.

The site collects details from fleet operators for 3,000 cars weekly. Consumer incentives include 2,000 Clubcard reward points. Before a car is put on sale, the RAC gives it 167 separate checks to ensure it is in good condition.

Tesco Chief Executive of Retailing Services Andrew Higginson said that the site eliminates the costly showroom and sales staff commission by supplying cars directly to consumers. About 1,000 independent garages will provide support after the sale.

Tesco says the finance and service deals offered by these will be 30 percent less expensive than those provided by dealers.

This move comes in the heels of webuyanycar.com, another online used car business, being chastised by the Office of Fair Trading. The company is accused of providing customers with lower prices than quoted online.

In the past, consumers have hesitated to purchase autos online from large dealers. Industry observers are interested to see whether having the trusted
Tesco brand associated with a trader will change this and stimulate the car finance industry.

In other Tesco news, the company recently watered down its grocery price matching promotion against its main competitor Asda. It was suspected that consumers were buying products only to get the double the difference refunds offered on these items.

Tesco now has a £20 per shop limit under its PriceCheck promotion.