The board of Ilkeston Co-op will make the merger recommendation to its members at a special meeting due to take place on September 6, and a second confirmatory meeting is scheduled for September 27.
Tony Teatum, Ilkeston Co-op Group chief executive, says that the future of the automotive businesses are still under review. “In the short term they will continue to trade as they are now, but who knows what will happen in a year.”
Midlands Co-op has a Suzuki dealership in Kettering, plus five car care and MoT centres, and two body repair shops.
Ilkeston Co-op has Alfa Romeo, Citroën, Fiat, Hyundai, Mazda and Seat franchises in Lincoln; Citroën and Peugeot in Grantham; and Peugeot in Alfreton, Derbyshire.
News of the merger comes at a time when many co-ops are opting out of the automotive retail sector due to poor margins.
In August 2004, the Ilkeston Co-op sold seven of its sites located in Derby, Burton on Trent, Loughborough, Mansfield, Ilkeston and two Nottingham to the Sunwin Motor Group. The move decreased Ilkeston’s turnover to £40m.
Last month AM revealed that the East of England Co-op, whose automotive business traded as the Sterling Motor Group, is planning to exit the sector.
In July 2005 the Priory Motor Group, which was part of the North Eastern Co-op, ceased to trade. The Wrights Motor Group, part of the Lincolnshire Co-op, closed its Boston and Sleaford outlets in early 2005, a move which was blamed on poor profits.