Reg Vardy, the UK's second biggest dealer group, is to invest around £1m a year in a new customer service satisfaction programme.

The group has appointed specialist company iSky to record the views of every single car buyer and half of servicing customers under the ExCEED (Exceeding Customer Expectations Every Day) programme. A benchmark score for customer service will be set up for Vardy's 77 dealerships to achieve.

The news comes as Reg Vardy announces pre-tax profits up 18.5 per cent from £33.5m to £39.7m for the year ending April 30, 2003. A string of disposals in the first half of the year reduced turnover from £1.39bn to £1.325bn but gearing was also cut to 13 per cent from 25.7 per cent just 12 months ago.

Chief executive Sir Peter Vardy is now looking to acquire 25 new dealerships as he strives to hit the 100-site mark in 18 months, with particular focus on the south, where it hopes to add 15.

Vardy says revisions to block exemption regulations will benefit the company by offering a more secure environment for retailers and helping the group to boost earnings to £2bn by 2004.