Pendragon eyes used car market as it shifts focus online 

Analyst says 'a few more clerical jobs' could go as a result of the review

Car dealer Pendragon is eyeing the used car market as part of a major strategic review of the business, as it seeks to become more digital-focused post-lockdown.

The company – whose brands include Evans Halshaw and Stratstone – will look to focus more on standalone used car sales, developing its UK franchised motor unit, and "growing and diversifying" its Pinewood software business.

Under the plan, its "Car Store" vehicle supermarket concept will be rebranded and restructured around eight purpose-built sites designed to provide digital sales and home delivery. The larger-footprint sites will cost around £7.5m each to construct. 

It said: "Whilst we fundamentally believe that there will always be a major role for bricks and mortar in vehicle purchasing, we expect these shifts in consumption habits to be permanent and that better digital and fulfilment experiences will be necessary to augment physical retailing."

It comes a month after the car dealer axed 1,800 jobs due to a drop in demand at its physical stores.

Pendragon hinted that there could potentially be some more cuts to come across the business.

It said: "We believe there are further cost base efficiencies we will be able to unlock across the property portfolio, through the replacement of manual process with systemic solutions and through reviewing existing key contracts and services."

Retail analyst Nick Bubb said "a few more clerical jobs" could go as a result of the review, but the more interesting part of it was "beefing up the Car Store brand and making more of the Pinewood business". 

He added: "Ironic that old Trevor Finn [Pendragon's founder, who left last year] used to dream of disrupting the used car market."

Car sellers suffered a huge blow when forced to shut up shop at the height of the pandemic, and customers have since been tough to lure back as fears over job security mount.

As Pendragon began to reopen post-lockdown, it cut costs by closing down stores and reducing its headcount. These measures will deliver around £37m of annual benefit, it said. 

Dealers are also increasingly embracing the internet for sales rather than relying on bricks and mortar.

The firm added that it will target underlying pre-tax profit between £85m and £90m by 2025 under the new strategy.

Shares gained 1pc to 8.09p.