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Virgin Cars poised for link with dealer group

Virgin Cars chief executive Ian Lancaster is talking to the bosses of leading motor retail groups about a possible partnership deal.

He is paving the way for the kind of dealership network/online service combination which he believes will lie at the heart of future UK car selling. No decision has yet been made.

This week, Mr Lancaster and Virgin chairman Sir Richard Branson were in Brussels pressing the case for Virgin Cars' right to buy directly from manufacturers.

Sir Richard and Mr Lancaster were at a two-day hearing arranged by Competition Commissioner Mario Monti to consider responses to a document released in November.

In effect, this stated the EC considered Block Exemption was not working in the interests of consumers.

Mr Lancaster said: “We believe we should have the right to buy straight from carmakers. As things stand, a manufacturer can insist we get supplies via one of its franchised dealers.

“That adds cost which has to be passed on to the purchaser, so we are asking the EC to end exclusive distribution.

"Instead, we would like manufacturers to sell cars to accredited retailers, with Virgin Cars being one of them.

"The hearing provides the right forum for us to get our points across.”

Mr Lancaster said Virgin Cars had spent seven months building the business under the existing rules, which was tough in the early stages.

Dismissing industry speculation that Virgin Cars was struggling, he said: “Sir Richard is happy about how it's going. We launched in May 2000 and reached £50m turnover by the end of the year. We are on target for sales to top £100m by May.”

Virgin claims orders for 3,200 cars, with 1,300 delivered. Up to 1,200 are due to be delivered by the end of February.

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