Tesco drives into the used cars business with launch of Tescocars.com

UK grocery sales are bumping along the floor as consumers cut back spending but the ever-entrepreneurial Tesco has found a new area to explore, used cars.

The giant retailer, which controls 30 per cent of the UK groceries market as well as being big in clothes, electrical goods, financial services and mobiles, has just launched tescocars.com which will sell former fleet cars to private customers.

The company is partnering with car industry veteran Sir Trevor Chinn, who owns a stake in online business Carsite and outsourcing specialist Innovation Group which has been hired to handle maintenance and servicing.

This follows the pattern of previous Tesco diversification. It set up Tesco Personal Finance with Royal Bank of Scotland, buying back the RBS stake for £950m in 2008 once the business was established.

Online car sales have been slow to take off in the UK (in comparison to other areas of online shopping anyway) presumably because of the item cost and the somewhat iffy reputation of the used car trade.

But new Tesco CEO Philip Clarke is clearly confident that his first big initiative since taking over from Sir Terry Leahy can reverse this with Tesco’s solid reputation and in-house financing through Tesco Personal Finance able to reassure customers.

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