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Finn breaks free

Pendragon this week opened new Jaguar and Aston Martin outlets in California as the UK's biggest dealer group begins a new relationship with Ford Motor Company.

Chief executive Trevor Finn ended the two-year joint venture in which the manufacturer held a 49% stake in Pendragon's UK network of 28 Ford dealerships. The shared company was named Stripestar. A joint statement heralded Pendragon's agreement to own Stripestar outright subject to shareholders' agreement at an emergency general meeting on November 2. The statement emphasised the mutual benefits of Pendragon owning and running its Ford outlets. But Mr Finn said: “It happened over a period of time though the idea was mainly ours. We believe we can make our Ford dealerships profitable – we need to rebuild the network, and in some ways that will be easier without Ford. “We are back to where we were before the joint venture was formed in 1999 but we have all learned a lot from it. If you don't try things, you don't grow – Pendragon had 16 dealerships in 1989 and now we have 111.” Mr Finn said ending the UK joint venture would not affect Pendragon's blossoming relationship with Ford's Premier Automotive Group. Pendragon has 28 Jaguar and 20 Volvo outlets in the UK, and is growing with the brands in Germany and the US. Pendragon's latest California outlets, both in Orange County, are South Coast Jaguar and a new dealership for Aston Martin in Santa Ana. Mr Finn said the Jaguar business was operating from temporary facilities in San Juan Capistrano (at a former Lincoln Mercury dealership) until a purpose-built facility was ready. “This dealership secures Jaguar representation for most of Orange County, California, which is one of the wealthiest and fastest growing areas in the US,” said Mr Finn. Bill Donnelly, managing director of Aston Martin Lagonda, said of Pendragon's new dealership: “This is a significant appointment for us. Orange County is our largest untapped opportunity and the business will be one of the largest Aston Martin dealerships in the world.” Pendragon now has four Jaguar and two Land Rover dealerships in California. The group has five Aston Martin territories in the UK and three in Germany. Mr Finn's strategy is to build a strong partnership with manufacturers, both in Britain and overseas. Germany is the biggest European market and California is the wealthiest in the US. He now sees the Stripestar venture as one which was worth trying, like Pendragon running all Fiat dealerships within the M25. That was abandoned earlier this year. Under the Stripestar agreement, Pendragon will pay £5.5m cash for Ford's share and assume borrowings of around £18m. The Pendragon/Ford statement said: “A single owner will enable a more rapid response to changes in a dynamic industry sector. It will also provide focus on business and property reconfiguration, an important element to improve the financial return on the business.” In the statement, Mr Finn said Stripestar had delivered an improved service. Progress on delivering a better financial return had been hampered by tough markets. Ian McAllister, Ford of Britain chairman and managing director, said: “This agreement will enable the Stripestar Ford dealerships to reach their full potential. Our agreement with Pendragon does not affect our other retailing joint ventures in the UK and Europe.”

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