DaimlerChrysler UK is preparing to take legal action against non-franchised car retailers who use the Mercedes-Benz logo without its permission.

After a legal wrangle lasting seven years, the company has stopped London car dealer P&S Motors from “the unauthorised and inappropriate use of the Mercedes-Benz logo, corporate images and likeness”.

One reason for DCUK’s determination to crack down on P&S is that it occupies a prominent position on the A40 Western Avenue, a busy commuter route to the west of the capital. Also, P&S is only a few miles from the Mercedes-Benz at Brooklands brand centre.

A DCUK spokeswoman said: “P&S infringed our regulations regarding the use of the three-pointed star that is so important to the Mercedes brand.

“If the company breaches the agreement we reached, we will take legal action. DCUK also wants this to be a warning to other independent dealers – we are closely watching a number who want to be seen as being associated with Mercedes.”

DCUK has learned from its experience with Smart before official distribution began. “Grey importers brought in Smarts from Belgium and Holland and if a customer had a problem they were told to take the cars back there,” said the spokeswoman.

Aman Thukral, managing director of P&S Motors, said the dispute with DCUK lasted so long because he believed he had been given permission to use a photograph of a Mercedes bonnet badge to promote his company. “Mercedes just wants to make a point,” he added.

P&S, a £14m turnover business, sells around 300 used Mercedes a year, bought from auctions and Europe. “I have told Mercedes I would like to be an authorised repairer,” Thukral said.