TESCO AREN'T BUT MAYBE THEY SHOULD
Monday, 23 November 1998
SO, Tesco isn't going to sell cars after all.

Dealers can all relax now after much fuss was raised last week in the wake of a Daily Mail headline which screamed "Supermarket to sell cars" and, in doing so, cut high UK car prices off at the knees. But it turns out to be just a prize giveaway, a one-month promotion in the run-up to Christmas.So, no sweat. Tesco, after all, can't possibly sell cars. Maybe it could sell them, and maybe it could even knock a few quid of the price, but a foodstore couldn't hope to provide the personal care and attention that the car buying public has come to demand and expect from its local, friendly franchised dealer. And when it comes to that thorny matter of service and repairs - well, forget it. Nonsense. Those who assume that the car dealership as we know it will carry on forever have their heads planted firmly in the sand. For all that the motor trade talks about modern retailing practice and focus on customer satisfaction - and has made great strides in recent years - Tesco is in another league. For all that motor dealers have improved their image in recent years, they remain lying charlatans in many consumer minds compared to the supermarket which, by virtue of providing good service that people trust and understand, has become the runaway food market leader and, with a roaring cash flow behind it, is successfully breaking into a range of personal financial services. Tesco could do it. The fact is that cars are threatening to pile up unsold outside car factories around the world, so car makers might be quite keen to do business with a retailer which can shift serious volume. Especially if Block Exemption gets the axe and exclusive dealer territorial rights go with it. Tesco doesn't have to handle cars to sell them. Given the consolidation of the dealer sector going on now, it can't be assumed that, say, potentially large numbers of dealers won't be happy to stay in business by becoming agents for Tesco, delivering and servicing new cars, taking trade-ins, collecting a fee from the supermarket which sold the car, the finance and the insurance. Contemplate the possibilities.
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