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AA prepares to move into motor retailing

The AA, which has paid Boots £5.75m for 129 Halfords service and repair outlets, will next year launch a car retailing operation.

It will start with a trial but is thought to have ambitious plans if the market is made more liberal following Block Exemption review.

Alistair Cheyne, AA deputy managing director, said Halfords gave the company “a base to introduce more motoring-based services”.

The outlets - to be renamed AA Service Centres - would be a “key step” in fulfilling the AA's ambitions to become a car retailer. Halfords' 410 retail outlets are not included in the sale.

The AA, owned by Centrica, is in discussions with manufacturers and retailers about “six strategic options for direct involvement in car retailing”, said Mr Cheyne.

He said a decision would be made by the end of the year, with trials to begin early in 2002.

“We will not be making any substantial changes or big moves into motor retailing for six or 12 months,” he said. “Timing for future action is of course influenced by the ending of current Block Exemption in September 2002.”

Daewoo, which uses 41 Halfords outlets to retail cars, said the six-year relationship would continue, though inside sources claimed the carmaker was looking to withdraw as it set up its own network of franchised dealers.

A Daewoo spokesman said the first dealers would be appointed within weeks, with 20 planned by the end of the year.

Research among the AA's 11.6m membership has supported its likely involvement in new and nearly new car sales. It already provides an online buying service, in association with Autobytel, on its website.

Centrica, through its British Gas and Goldfish credit card operations, has a massive database of customers, estimated at 20m, which could be exploited by the AA.

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