Inchcape Retail is planning a cull of several of its franchise partners in a “streamlining” programme proposed after its £263m acquisition of European Motor Holdings.

The UK’s second largest dealer group represents 21 brands at 112 dealerships.

The 480p per share recommended offer for EMH, which was required to be accepted by shareholders before January 11, will add 52 outlets representing nine premium brands. Just one, Bentley, is not already represented by Inchcape.

Bentley is not expected to withdraw the franchise, which is held at three sites.

Inchcape will then begin a review of its portfolio, in line with a strategy of focusing on fewer partnerships of a larger scale, achieving 5% to 10% of its manufacturer partners’ national sales.

Key partners include: Audi, BMW/Mini, Honda, Toyota/Lexus, Mercedes-Benz, Volkswagen and Ford Premier Automotive Group brands Jaguar and Land Rover. For some, Inchcape expects to exceed its 10% target.

“This streamlining is expected to create opportunities to achieve efficiencies and economies of scale, in line with Inchcape’s margin enhancement objectives,” says the company.

It already plans to sell EMH’s car wash and motor auction businesses. The company has yet to make a decision on the Perodua UK import operation.

EMH is a perfect fit for Inchcape, meeting its growth strategy for contiguous territories. EMH sites are largely based in the north east and north west, which complements Inchcape’s south-east, M1/M62 corridor heartland with very little overlap.

Prime contenders for disposal include its single Mitsubishi dealership in Colchester, acquired during the Lind purchase (Mitsubishi is still in talks with Inchcape about the site), Renault outlet in Southampton and Kia dealership in Burton.

The EMH acquisition will boost Inchcape’s turnover to almost £3bn. It will have 10 Audi sites, more than 8% of the carmaker’s network, 18 BMW outlets (11%), 11 Jaguar, nine Land Rover, seven Volvo and 27 Volkswagen, 11% of the network.

The UK’s two largest retail groups, Pendragon and Inchcape, now account for almost half (47.5%) of Jaguar’s 99-strong network.

EMH shares have risen from 405p to 486.5p since the offer was disclosed on December 5, 2006; Inchcape’s from 494p to 513p.