Back in 2003 when the Asbury Automotive Group decided to pull the plug on a test selling used cars in lots set up in four Walmart parking lots, we were surprised. We figured the locations had the traffic and proper demographics for the venture to succeed. It would certainly prove a winner for Walmart, which only leased out the space in the lot and was not responsible for the inventory and other costs.
Over the years, non-auto retailers have flirted with car and truck sales. The warehouse clubs, for example, are all involved with car buying services for their members.
This week, two news items caught our attention.
First, Tesco announced it was launching TescoCars.com in the U.K. The site offers shoppers the opportunity to buy used cars online. Consumers reserve their car on the website with a £99 deposit. They are then sent a full RAC (Royal Automobile Club) report on the car along with links to a video and photo gallery of the vehicle. If the shopper is happy with the auto, they can pick it up themselves or have it delivered to their door for £149. Cars, which come with a free RAC platinum warranty, can be financed through Tesco Bank.
According to the website, cars are sold directly to consumers by banks, leasing firms and fleet operators. By selling the cars online, the physical costs associated with running a dealership are largely eliminated, allowing for greater savings to consumers. TescoCars intends to offer up to 5,000 cars on a weekly basis with updates happening daily.
TescoCars.com has partnered with the National Service Network garage group which will operate Tesco Autocenters. The centers will offer vehicle repairs at "up to 30 percent less than main dealer garages." TescoCars.com purchases and repair work done at Tesco Autocenters will all come with Clubcard points.
There were mixed reviews to Tesco's new venture in the U.K.
Car Dealer Magazine columnist James Litton, who is also a used car dealer, tweeted, "Just been reading RAC reports on Tesco Cars. Tires on the legal limit, poor wiper blades, stuff not working. Game changer? Not with this model."
Steve Fowler, editor-in-chief of What Car?, said cars on the site were "well priced" and the selection was a "decent offering."
In another auto venture closer to home, Home Depot and Penske Truck Rental were sufficiently happy with a test of truck rentals at 100 of the home improvement retailer's stores to expand the offering to 400 locations across the U.S.
Ron Defeo, a spokesperson for Home Depot, told Dow Jones Newswires that consumer interest led to the expansion and that future results would determine if truck rentals eventually became standard at the chain's roughly 2,000 stores.
Penske also has about 2,000 locations across the U.S. and trucks rented from Home Depot locations can be returned to either companies' lots.
Home Depot's primary rival Lowe's does not offer a similar service.