Nice article. However, I'm not convinced there's a problem with the car supermarket business model itself -- maybe just with Motorpoint.
Cargiant in west London continues to absolutely print money -- a PBT of £42m on turnover of £398m in the most recent year available to December 2022. This was a 46% yoy profit increase, while Motorpoint slumped to a LBT for their similar period to March 2023.
Ah, but 2022 was an astounding year for used car sales, given the huge increase in used car prices. So just letting cars sit on the lot for 40-50 days before selling was hugely profitable. So I'm not quite sure Cargiant's FY-Dec22 performance would be repeated in FY-Dec23.
You're right that Cargiant performed much better than Motorpoint over the same period of time. Motorpoint had two own goals; they had lack of stock (as they focused on 1-4 years old vs Cargiant, older). And they refused to pass on increased interest financing costs, but it seems like the incremental volume did not make up for the margin loss.
Nice article. However, I'm not convinced there's a problem with the car supermarket business model itself -- maybe just with Motorpoint.
Cargiant in west London continues to absolutely print money -- a PBT of £42m on turnover of £398m in the most recent year available to December 2022. This was a 46% yoy profit increase, while Motorpoint slumped to a LBT for their similar period to March 2023.
Ah, but 2022 was an astounding year for used car sales, given the huge increase in used car prices. So just letting cars sit on the lot for 40-50 days before selling was hugely profitable. So I'm not quite sure Cargiant's FY-Dec22 performance would be repeated in FY-Dec23.
You're right that Cargiant performed much better than Motorpoint over the same period of time. Motorpoint had two own goals; they had lack of stock (as they focused on 1-4 years old vs Cargiant, older). And they refused to pass on increased interest financing costs, but it seems like the incremental volume did not make up for the margin loss.