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Carmakers target dealers' freeholds

Leading car manufacturers are planning to buy hundreds of dealership freeholds in a move that will redraw Britain's automotive retail landscape.

AM has learned that Volkswagen alone wants to purchase 100 freehold contracts from its dealers - mainly in urban locations. Vauxhall, Honda and Toyota are understood to be among other carmakers on the hunt for freeholds.

“This is vertical integration by stealth,” says Alan Pulham, franchised dealer director of the Retail Motor Industry Federation. “Manufacturers have emphatically denied that this was going on in recent months. Dealers must not sell freeholds. It is like handing over control of their businesses. Without the freehold the dealer becomes the manufacturer's servant.”

The news is further proof that manufacturers are ready to take radical steps to safeguard their control over sales and distribution under the new block exemption rules due to come in during September. One retail boss told AM that dealers were “panicking” because the carmakers were sending teams around the networks to persuade them to give up their freeholds.

Vauxhall is understood to have identified around 50 dealer locations whose territories cover 78 per cent of the population. These are the sites it is seeking to control, said the source. “We want to make sure we have a say in how our cars are sold in the future,” says Andrew Andersz, director of public affairs for Vauxhall.

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