Category Review
Autozen, a Canadian technology and service firm, was founded in February 2021 to improve the security and efficiency of used car transactions. The platform aims to reduce friction and safety in private pre-owned vehicle transactions (Alhakamy et al., 2023). It procures high-quality vehicles and maintains a network of potential buyers, ensuring customers receive the best price without unfair sales tactics. The operational procedure of the organization entails customers presenting car details, followed by the corporation offering an estimated range of worth. Subsequently, an inspector conducts a comprehensive 140-point evaluation and captures photographic evidence (Grieco et al., 2023). Autozen’s transaction data shows an average deterioration rate of 6.2% annually, indicating a 6.2% decrease in a car’s value compared to one year ago. This trend is lower than historical statistics before the chip shortage, which saw a 20% decline in the first year and a 15% decline in subsequent years. Mainstream automobiles have a depreciation rate of 4%, while luxury vehicles have a higher rate of 9.8% (Appendix 1). Depreciation rates vary by country of origin, but the cumulative extent of depreciation remains low compared to past benchmarks.
Competitive Review
Autozen faces competition from key players in the automotive business, such as General Motors, Cutch, Carnexa.ca, and AutoCanada, among others. These competitors have customized their platforms to enable sellers of used cars to reach their target audience, thus putting pressure on Autozen.com to protect its competitive advantage.
Canada used car market- internet penetration rate (%) in Canada, 2019-2022
Source: https://www.mordorintelligence.com/industry-reports/canada-used-car-market
The demand for pre-owned vehicles in Canada has experienced growth as a result of technological advancements, the emergence of e-commerce platforms, and the prevalence of online advertising. From the above figure, Canada’s current internet penetration rate is 92.07%, indicating a significant rise compared to the 91.5% recorded in 2021. Given that 82% of the populace resides in metropolitan regions, those with a propensity for technological proficiency are more inclined to engage in well-informed decision-making processes. The projected trajectory of the online used vehicle market indicates a favourable growth outlook in the foreseeable future. Notably, prominent industry players such as General Motors, Clutch, Carnexa.ca, and AutoCanada, among others, are strategically incorporating online platforms into their operations to expand their market reach and provide customers with improved services and interactions (Alhakamy et al., 2023). Including various visual media, convenient fast financing options, and insurance and warranty services are anticipated to contribute to the growing demand.
Competitive Comparisons On Company Services, Better Business Bureau, Positioning, And Similarweb Traffic Ratings.
| Company | Selling a car | Reputation (BBB ratings) | Position- claims concerning clients | Total website visits (Similarweb in October 2023) | Avg Visit Duration (Similarweb in October 2023) |
| Autozen Inc. | The firm provides a platform where thousands of buyers compete to give out the best offers for one’s vehicle. They allow clients to sell their cars from their comfort zones without haggling or hassling. | BBB accredits the company with an A rating. | Offers a hassle-free platform to sell used cars and help reach hundreds of buyers. | 28.2K | 00:12:29 |
| Canada Drive | The company offers you a platform to sell your vehicle. Offers free valuation tools to enable one to identify the value of their car. | It has not been possible to buy online cars from Canada Drive since March 2023, | Offers vehicle financing options enabling selling or buying a car online. | 762.6K | 00:01:32 |
| Clutch motors | The company provides a framework for trade-ins | According to Finder Canada review, the company is accredited by BBB with an A+ rating. | Provides a seamless vehicle-selling experience and offers countless used vehicles online with a 10-day refund guarantee. | 1.6M | 00:02:30 |
| Auto Trader | Offers online platform to sell your car. They also allow trade-ins and free valuation to sell your car. | BBB does not accredit the company | Enables customers to buy or sell vehicles online | 26.8M | 00:05:25 |
The table above shows different perspectives regarding the competitive threats of four companies: Autozen.com, Clutch Canada, Clutch Motors and Auto Trader. Autozen has an A ranking per the BBB review, whereas Clutch Motors has an A+ rating according to the Finder Canada review. This means these companies are involved in legitimate business with positive customer reviews. The collaboration of these two companies has also enhanced faster customer experiences and convenience, contributing to its better BBB rating and good reputation. BBB does not credit Canada Drive and Auto Traders due to negative customer ratings, reducing reputation. According to Similarweb data, Clutch has higher total website visits (26.8M), whereas Clutch motors, Canada Drive and Autozen have 1.6M, 762.6K and 28.2K, respectively, as of October 2023 (Grieco et al., 2023). However, Autozen recorded the highest visit durations (00:12:29) despite low website visits, whereas Canada Drive registered the lowest visit durations (00:01:32).
Comparing Competitive Advantages and Disadvantages of the Four Companies
| Company | Advantages | Disadvantages |
| Autozen.com | 1. Offers a large inventory of over 1,000 cars of different brands with detailed inspections and car history records.
2. It has partnered with Clutch to enhance selling experiences and make them more convenient. |
The shortage of cars in the market has caused used car prices to rise, and some customers might opt out for new cars instead. |
| Clutch.ca | 1. Provides weakly deals on discounted vehicles
2. Its loan terms are most flexible, running for 12-96 months. |
The company needs to provide detailed information on determining firm offers for a vehicle, resulting in a lack of trust by potential customers. |
| Canada Drive | 1. Provides financing options such as new vehicle loans and credit vehicle loans. | Buying big-ticket-like vehicles usually results in pent-up demand and delays during shipments. |
| Auto Trader | 1. Helps customers buy or sell used vehicles.
2. Allows trade-ins and free valuations to help sell your car. |
The Better Business Bureau does not accredit it since some consumers have reported negative experiences with the company. |
Market Trends
The Canadian used automobile industry needs more cars due to supply chain disruptions and rising loan rates. Despite the Bank of Canada’s cost reduction measures, affordability remains a significant issue. The supply restriction may be due to extended vehicle ownership, affecting product flow. Despite this, Canadian used car dealers are showing commendable performance, projected to generate $17.5 billion in 2023 (Hall, 2022). Therefore, Autozen has a significant opportunity to offer its comprehensive selection of pre-owned vehicle brands, easing potential difficulties for buyers and dealers.
References
Alhakamy, A.A., Alhowaity, A., Alatawi, A.A. and Alsaadi, H., 2023. Are Used Cars More Sustainable? Price Prediction Based on Linear Regression—sustainability, 15(2), p.911.
Grieco, P.L., Murry, C. and Yurukoglu, A., 2023. The evolution of market power in the us automobile industry. The Quarterly Journal of Economics, p.qjad047.
Hall, K.W., 2022. Marketing Strategies for Automotive Dealerships in Grenada (Doctoral dissertation, Walden University).
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