Tesco takes to second hand cars

Following its forays into pawnbroking reported last month, it now seems that the mighty Tesco is getting ready to enter the used car market.

Established businesses have emitted a quiver at prospect of the supermarket giants launching a used car dealership later this year. Experts believe the move could see Tesco eventually selling hundreds of thousands of cars a year.

James Baggott, editor of Car Dealer Magazine, said: 'The big dealer groups are very concerned. From what we've heard, Tesco is looking to take a very large slice of the market.'

Baggott believes that Tesco may try to undercut existing dealerships and then make up the difference with finance packages and insurance.

The chain, which accounts for 1 of every 7 pounds spent in the high street, has already tried its hand at garden centres, insurance, mobile phone contracts and tyres. It has an estate agency website – isold.com – and plans to offer mortgages later this year.

But one car dealer, David Sheldon, managing director at car supermarket Motorpoint, believes the move may be a step too far. 'I think the idea of one of the Big Four supermarkets such as Tesco selling cars online is a step too far,' he said. 'It's one thing selling electrical items such as TVs and washing machines, but it's quite another selling cars.

'Cars are highly emotive and if they get it wrong the potential to damage their brand is enormous.'

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