Online car retailer Cazoo is to wind down operations in mainland Europe to focus on the core UK market.

Cazoo said its withdrawal from the EU ensures business has a plan that removes requirement for further funding

The firm, the latest venture from property website Zoopla founder Alex Chesterman, launched in the UK in late 2019 with plans to be the ‘Amazon’ of the used car market, and subsequently moved into Germany and France in late 2021, Spain in May this year and Italy in June.

Following a strategic review of the business announced in August, the business has said it’s withdrawing from the EU with the aim of further preserving cash and positioning the company to achieve profitability without the need for funding.

The move is expected to bring net savings of over £100m by the end of 2023 and the company is now targeting cash flow breakeven by the end of 2023, at which point it expects to still have approximately £100m of cash on its balance sheet.

Cazoo added that the right course of action was to focus on the enormous addressable used car market in the UK; said to be the largest in Europe with c.8 million transactions, worth over £100bn annually. The company saw record UK revenues and retail unit sales in August despite the tough macro-economic backdrop and says it’s well-positioned to capture the “enormous UK market opportunity” over the long term. It believes it can gain a 5% or greater market share.

The retailer is now planning to start an orderly wind down of its operations in Germany and Spain and is in consultation with its employee representatives in France and Italy. It’s also notified the relevant employee representatives and unions in each market.

Alex Chesterman, founder and CEO of Cazoo, said it was a tough decision and added that the company would look to support all the colleagues in the EU who are impacted.

“The strong customer demand we are seeing in the core UK business gives us high confidence in the future opportunity,” he continued, “and the decision we have taken today to withdraw from mainland Europe ensures that our balance sheet remains strong and that we have a plan which we believe no longer requires any further external funding.”