Pendragon has been forced to give up the five Volkswagen dealerships it acquired during its takeover of Reg Vardy. However, it has just signed terms to retain Vardy’s 14 Renault dealerships.

Block Exemption rules allow a carmaker to prevent a dealer group gaining its franchise through acquisition if it is not already a retail partner.

Volkswagen Group bought the loss-making VW businesses from Pendragon chief executive Trevor Finn last week for £16.7m and immediately transferred them to its chosen dealers. It took a similar decision in 2002 with two Audi dealerships Pendragon gained from CD Bramall.

Finn recently told AM he hoped to keep the Volkswagen franchise. VW says its decision is aligned with its strategy of market territories.

However, Paul Willis, VW UK managing director, adds: “We do not rule out having a retail partnership with Pendragon as we do not rule out a partnership with anyone.”

Renault UK says it “will be meeting with Pendragon shortly to discuss the future”. Finn says this is routine – he meets all his manufacturer partners for regular business reviews.

Leicester VW has gone to Sean Booth, owner of the VW franchise at Parkway, Derby. Stafford VW went to Rees Caddick, already a VW franchisee at Stoke-on-Trent.

Andrew Hockeday, previously a regional manager with Reg Vardy, has been granted the VW franchise for Wolverhampton, Redditch and Stourbridge.

Sir Peter Vardy now plans to help his son, Peter, begin a new dealer group in Scotland, trading as Peter Vardy Ltd.

Sir Peter adds: “We are meeting all our ex-partners and will look at a number of opportunities. We had a very good relationship with all manufacturers and they all seem to be supportive of a new start.”