Mitsubishi is in talks with potential partners to take over representation of its franchise in Manchester after the collapse of local dealer Horners Motor Group this month.

The £30 million turnover motor retailer, headed by managing director Richard Haytack, called in insolvency practice BDO Stoy Hayward after it encountered financial difficulties.

Dermot Power and Matthew Dunham, business restructuring partners at the firm, conducted a review and concluded that there was no option but to close Horners’ two sites in Manchester and Rochdale with the loss of around 73 jobs.

The receivers hope to sell the two properties.

Dunham said the business was a victim of an increasingly competitive motor retail market, poor margins and rising costs.

Horners had downsized considerably in recent years, after being badly hit by the collapse of main manufacturer partner MG Rover, with which it had five dealerships.

Four years ago, the group had 10 franchise points sites in Blackburn (MG Rover), Burnley (MG Rover, Fiat, Fiat LCV), Bury (Skoda) and Eccles (Mitsubishi and MG Rover), but at its collapse this month it had just two sites - Manchester (Mitsubishi, Mitsubishi LCV and Skoda) and Rochdale (Mitsubishi).

A spokesman for Mitsubishi said: “We were very disappointed that Horners ended up with the administrators being called in – we had been partners with it since March 2001.

“Horners was hit hard by the collapse of Rover and we had been working closely with it to overcome the problems that collapse caused, but unfortunately we were ultimately unsuccessful.  That was particularly disappointing since the Mitsubishi elements of its business were doing well.”

New car stock has been removed from the Horners outlets in Manchester and Rochdale.

The spokesman added: “We are currently in discussions with a number of potential partners to take over representation of Mitsubishi in Manchester.  Obviously these discussions are confidential at this stage.”

An industry source told AM that Horners was five-times over-facilitised, with overheads that outweighed its trading position.

“The problem is that its remaining sites were built for Rover, a franchise with a 10-12% market share, but it was left with franchises which combined had at most a 2.5% share,” he added.