Sir Peter Vardy, Reg Vardy chairman, is poised to further grow the company's standing 'north of the border'.

He is about to begin talks with Glenn Henderson, who operates the Mercedes franchise in Ayr, Scotland, which will lead to the purchase of the west coast dealership.

He also intends to hold discussions with Pendragon boss Trevor Finn regarding the acquisition of its Derwent dealership.

Reg Vardy has secured the Mercedes-Benz franchise for Glasgow after purchasing Ian Philp for £3.96m. The dealership, to the south of the city, complements Reg Vardy's existing M-B showroom in central Glasgow. Mercedes-Benz has given the west of Scotland territory to Reg Vardy as part of its controversial network restructuring plans. In Scotland, it intends to cut the number of dealer partners from eight to three.

“We're now responsible for the whole of the west of Scotland,” Sir Peter said. “The purchase of Ian Philp is just the start of the changes which will take place across Scotland with Mercedes-Benz.”

The £17.8m turnover dealership will be renamed Vardy Continental.

The Edinburgh-based Western Group and the award-winning John R Weir group, which has its headquarters in Grangemouth, are expected to acquire rival Mercedes-Benz outlets as they complete the carmaker's representation in Scotland.

Mercedes-Benz, which enjoyed a record 12,897 registrations last month on the back of a 54% surge in A-Class sales, is understood to also be planning a used car operation in Central Scotland.

The move has angered dealers with one senior executive accusing the company of “putting the boot” into their used car operations.

“I really don't know what they think they are playing at. This whole situation is just such a costly mess for everyone involved,” he said.