CAZOO has halved its sales ambitions for the year and is now looking to sell between 40,000 and 50,000 cars, rather than the predicted 80,000 to 100,000.

The online car retailer yesterday told analysts and investors it was shrinking its ambitions to a "more modest" top line, as it sought to return to profitability without the need for further funding from investors over the next 18 to 24 months.

Cazoo said that reducing the volumes of cars sold would allow it to focus on higher value vehicles and improve its growth per unit from the current £600 to £1,500 by the end of 2023.

Cazoo boss Alex Chesterman - who founded the New York-listed company in 2018 - also announced he would be stepping down as chief executive from 1 April. Chesterman will remain on board as full-time executive chairman and hand the CEO reins to Cazoo's chief operating officer Paul Whitehead.

The company said the splitting of operations would allow Chesterman to focus on the retailer's "strategic direction".

The change in management comes after a difficult year for the firm, which has seen its shares collapse 93 per cent. Shares continued to tumble yesterday.

Cazoo was forced to revise its business plan after reporting a £243m half-year loss in August. As a result it offloaded its European operations - cutting 750 jobs - and focused solely on the UK.

The company warned yesterday it would be making "further headcount reductions" to rein in costs.

"Whilst 2022 was a challenging year in many respects, our continued strong growth, notable improvement in unit economics during each quarter and market-leading consumer feedback gives us strong confidence in the long-term opportunity for Cazoo," Chesterman said.

"We also remain on track and on budget with our withdrawal plan from the EU, having disposed of our Italian and Spanish businesses and largely wound down our French and German operations in the fourth quarter 2022," he added.

There was some good news for the firm, with the retailer reporting a 100 per cent increase in sales in the three months to 31 December.

In the fourth quarter of last year, the used-car retailer sold around 17,750 vehicles for a total of around £315m.

(c) 2023 City A.M., source Newspaper