Online autoseller Cazoo has made a U-turn on its sales model with a plan to sell all its used car stock as the sales giant moves to become a car marketplace.

The change, described by Car Dealer magazine as a "bomshell announcement", will shift Cazoo into a head-on retail battle against Auto Trader, Motors and AA Cars, with Cazoo adopting a marketplace model and merely being the platform for third-party sales. Some job cuts are expected in addition to those announced last year.

The new direction will enable private car sellers to use the platform in a process that Cazoo hopes will generate leads for dealerships and connect motor traders with sellers' cars.

To pave the way, the retailer is now shifting 3,500 units of used cars via retail and wholesale channels.

Paul Whitehead, CEO of Cazoo, will also exit his role later this month.

In a statement, Cazoo said: "Paul has successfully focused Cazoo on the business's core UK retail opportunity, delivered improved gross profit per unit quarter on quarter, significantly reduced costs and extended the company's cash runway. He oversaw completion of a restructure of the company's debt before leading the Board's recent strategic review of Cazoo's business model."

Mr Whitehead added: "Transitioning Cazoo to a pure-play automotive marketplace business model leverages our key advantages: the nationally recognised and trusted Cazoo brand and the Cazoo ecommerce technology platform.

"We have built a data-driven business for buying and selling cars and having sold close to 160,000 cars we have demonstrated that there is robust demand for online transactions in the automotive market. Our transition means we can now offer the UK's 13,000 car dealers the chance to put their forecourt stock in front of the one million potential customers on average who visit the Cazoo website every month."

The UK used car market represents a significant opportunity for Cazoo, he said, given around seven million transactions annually, worth an estimated £100 billion.

Perhaps ironically, Cazoo's move comes amid an upturn in the used car market, which grew by 5.1 per cent in 2023, activity being attributed to supply improvements, price stabilisation and record sales of electric cars.

In December, Cazoo changed its capital structure and a new board of directors was appointed, announcing that a "pivot to a pure-play marketplace business model" was the best direction for Cazoo and its stakeholders.

The brand, which has seen more than £100m investment, sits within the top five most recognised UK automotive brands, having sold almost 160,000 retail cars entirely online since 2019. Cazoo also believes the move will leverage its substantial customer and data resources, including the 185,000 valuations it provides every month to consumers looking to sell their car.