Change of face not game - The Tesco story...

So, after months of speculation, it has finally happened. Tesco are taking us on gang and I for one am not worried in the slightest. The talk of Tesco bringing about a revolution in the used car world is nonsense.

Can anyone remember Virgin Cars? Do Chevrolet still sell from Halfords? No. This business is unique.

Tesco is just Carsite rebranded. Carsite operate in a similar fashion to the recently departed Autoquake.

For those who are not aware, essentially Tescocars.com will be a re-marketing channel for leasing companies who are able to return improved residuals on end of contract cars. The benefit to Tesco will be a handling fee but most importantly the opportunity to upsell finance and insurance products.

Customers reserve cars for £99 and can either collect from a regional centre or have them delivered for £149 anywhere in the country.

In theory the process is easy, effective and allows Tesco to tap into the millions of customers they have stored on their database. So why am I not worried?

Primarily the purchase process allows for no test drive, no inspection or no part exchange. Three of the most fundamental parts of the used car buying decision. I know there are descriptions and virtual test drives and this will be good enough for some buyers but enough to change the market? I think not.

People may argue that a customer can sell their car through webuyanycar.com and then buy one from Tesco for an apparent 20% less. So that is 20% less for your part exchange made up by 20% saving.

The used car business has been, is now and always will be about the cars. They are unique, one of a kind. After a week of ownership from new, no two identical cars will ever be the same again. Therefore, Tesco will only ever be as good as their stock which in their case is limited purely to ex lease, Motability returns and daily rentals.

Of course dealers of all types rely on ex Motability or leasing cars but Tesco are only acting as an agent. They are not setting the price. Therefore the prices will only ever reflect what the cars are realising in an auction on any given sale day. Leasing companies do not owe Tesco a living!

Then there is the post purchase experience. I thought the website was a little ambiguous but from what I gather there is a 7 day cooling off period and a 3 month warranty.

If you don't like the car just send it back? Yes, less your £99 deposit plus the delivery fee. Great from a customers perspective but what will leasing companies think when they have had a car returned three times and are still awaiting payment?

You can never understimate the power of being a local garage in a local town. If you have the same car as Tesco (it may even be £250 more), the fact that the person can touch, feel, drive and part exchange their car will be enough to make it a futile exercise.

The 'Tesco Autocentre'. This is another name for a the NSN, a symbol group for a large number of independent garages. There will be no consistency in performance or ability. Some will be good, some will be bad. However, go into any Tesco store up and down the land and the product and service delivery will be the same.

Tesco are taking a massive risk using so many third parties to deliver one product under their priceless brand. The cars have to be great (I have sent a few MFL Direct cars back in two years of being a customer), the price has to be accurate, the models have to be desirable, the car has to have no problems and if and when they do, NSN have to be flawless. If a customer wants to return a car there has to be a no quibble approach. This is what people expect of Tesco but I believe they cannot control enough elements to make it happen.

I do not doubt for one minute that they will sell cars and if I was someone like Motorpoint I would be worried. However there is one thing to remember, any mug can sell cheap cars, Autoquake sold thousands of them. They just made no money, something Tesco historically have been very good at...