German car subscription provider Cluno will no longer offer car subscriptions for future customers because of British parent company Cazoo’s new austerity program.
From June onwards, the companies will generally no longer offer car subscription in order to reduce risks on the way to profitability and securing liquidity beyond 2023. Existing contracts will continue.
Although the companies continue to see growth, Cluno’s parent company sees itself as threatened by recession. As a result, it is now focused on achieving improved and sustainable profit margins by restructuring its businesses. The start-up aims to save a total of £200 million ($239.9 million) between June 2022 and the end of 2023.
Cazoo is now planning to cut jobs by about 15% in order to reduce costs per vehicle sold, increasing efficiency in purchasing, vehicle preparation and customer service. Due to the slow expiry of the existing contracts, Cazoo said that it would now be able to obtain more vehicles for remarketing in the short term.
For the current year, Cazoo is targeting 70,000 to 80,000 cars sold, a turnover of £1.4 billion ($1.68 billion). Cluno, which was acquired by Cazoo in 2021, was expected to take a central role in the European subscription business and prepare the company’s entry into the German market.
Cluno was founded in 2017 in Munich and was one of the first providers of car subscription services on the German market. Customers could book their cars online or via the app for a fixed monthly fee that covered all costs. After a minimum term of six months, subscription customers could return or switch their car with three months’ notice.
Cazoo is a London-based digital company for trading used cars and is listed on the New York Stock Exchange.