Kernahan had the area’s Kia franchise from February 2004 to September 2005, but continued to offer aftersales service to Kia owners for a further six months.
The dispute began when the dealer claimed Kia was failing to make warranty and sales bonus payments.
Managing director Michael Kernahan says: “The settlement that has been mutually agreed is fair and equitable.
“It is unusual for a dealer to take legal action against a motor manufacturer, but in my view the previous senior management of Kia were behaving in an unacceptable manner.
“We conduct our business in a straightforward manner and we expect others to do the same. “I believe the new management team at KMUK has introduced a much more appropriate level of professionalism to the business. However, we have no ambition to renew our links with Kia.”
Kernahan, a former Rover dealership, used to sell grey- import Mitsubishis and exported Minis to Japan, as well as having a Caterham franchise on site. It now has a Ford franchise, gained after the MG Rover collapse.
“Historically, Ford hasn’t had a good reputation but if you’re a franchised dealer and you’re serious about selling cars it’s a brilliant franchise,” says Kernahan.
A Kia UK spokesman says: “We are pleased that this particular disagreement has been resolved and it remains our intention to work with all our dealers in a true spirit of partnership.”
The carmaker has yet to appoint a replacement franchise in Oxfordshire, although it has been in talks with local dealers.