Petchey, who also has a 4.5% stake in Lookers, has a track record as an activist shareholder and is expected to lobby Pendragon's board to make changes to improve its stock market performance.
Today's Daily Telegraph suggests these could be to pursue a merger, change its business model or to raise equity through sale and leaseback of its remaining property assets.
Market analysts believe shares in Pendragon are undervalued. In the last six months its share price has halved to trade currently at around 34p.
Petchey has had a long involvement in the car trade. At the end of the World War II, Petchey founded a one-man car-hire business, before branching out to sell cars. At one point, he became one of Britain's largest Austin Morris dealers with a chain of showrooms.