Online car retailer Motorpoint is better equipped to navigate a volatile market compared with rivals, according to chief executive Mark Carpenter.
At a time when competitors such as Cazoo and Carzam are either enforcing significant cuts to stay afloat or collapsing, Motorpoint’s profits and revenue boomed.
In the year ended 31 March 2022, the company’s revenue increased 83 per cent to £1.3bn while profit before taxes grew to £21.5m – a 121.6 per cent increase on 2021’s £9.7m.
According to Carpenter, the company’s positive performance was the result of an extremely strong market driven by higher selling prices as well as Motorpoint’s focus on brand awareness and marketing.
Motorpoint’s market share also increased, going up from 2.4 per cent last year to 3.1 per cent.
“We have a very strong customer-led proposition,” Carpenter told City A.M. “So once we go into a market, we take share quickly.”
Looking ahead, the retailer said it will not be exempt from demand slowing down because of inflationary pressures on consumers but it will continue to take market share by investing in its brand.
“We believe the market will be slightly smaller but we are investing more in technology and marketing to ensure that we are future-proofed for the business to grow,” he added.
“We want to make sure that whatever the consumer backdrop is, we will continue to be successful.”
Carpenter’s comments come as rival Cazoo was forced to cut 750 UK and EU jobs to save £200m by the end of next year.
The online retailer said it wasn’t immune to “the rapid shift in the global economy” as well as the possibility of recession hitting the UK in the next few months.
Cazoo was not the only car retailer that was brought to its knees, as Carzam entered voluntary receivership last month after failing to raise funding.
Carzam’s co-founder Peter Waddell blamed Cazoo’s shares slumping on the NYSE for the lack of backing.
Motorpoint, on the other hand, said its cost base strategy was already aggressive, allowing the company to keep its headcount while continuing to invest.
“We’re very positive that the continued investment that we’re making will lead to more success in the longer term,” Carpenter concluded.