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Scotland plc formed to barter for dealers' fleet-level prices

Scotland's car dealerships are ready to form a number of buying cooperatives, branded unofficially as Scotland plc, to maximise their purchasing power with car manufacturers.

The move comes in the wake of the recommendation by Trade and Industry Secretary Stephen Byers that the level of discount offered to fleet buyers should be made available to retail dealerships.

April registrations in Scotland fell 16% compared with the corresponding month last year, from 13,509 to 11,337, despite the year-to-date figure showing a 4% increase.

One Scottish dealer called the month a “complete and unmitigated disaster”.

He added: “We are all aware there is pent-up demand for new cars in Scotland but fewer and fewer people are willing to take the risk of paying dealership prices for new cars.

They see the shadow of price reductions coming just round the corner. “Either the Government takes decisive action or we have to form ourselves into bodies big enough to take advantage of the discounts Mr Byers referred to in his initial report last month.”

The Scotland plc buying programme is believed ready to become active after Mr Byers responds this month to the representations from carmakers and other interested parties to his initial report.

“We are ready to move, and even if it means we have to start importing cars from mainland Europe ourselves as dealership groups,” said the dealer.

Two £100m-plus turnover groups to hit the headlines recently because of difficult market conditions are Aberdeen-based Anderson Cars, which called in the receiver, and Abercromby in Edinburgh, which was forced to begin a stringent downsizing operation.

Anderson Cars blamed a lack of “muscle power” to negotiate discounts with carmakers.

The Scottish Motor Trade Association stopped short of endorsing the planned cooperatives action, though executive director Douglas Robertson said: “We would not put obstacles in the way of any of our dealers who were keen to maximise their business. We would applaud any dealer who tries to increase their bottom line profit by legitimate means and there's clearly nothing illegitimate about what is being talked about.”

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