JCT600 is set to invest £4.7m in a new Audi dealership in a project that will create a two storey used car display area.
The showroom will be built at Centurion Park, York.
JCT600 has obtained planning permission for a major redevelopment that will see the existing dealership demolished and replaced with a 17 car showroom featuring a two storey external used car display area capable of displaying 60 cars.
Another building nearby will house a 20 bay workshop, large valeting department and compound facility.
John Tordoff, chief executive of JCT600, said: "This major investment in Audi York is part of our commitment to creating world class facilities for our customers and staff.
"Over the next 12 months we will be undertaking a massive £10m redevelopment programme to improve the customer experience across a number of our dealerships."
It has also bought vacant land in Hull which will be developed to provide aftersales support for its Audi Hull dealership and house a VW Commercial Vehicles business.
Audi York and Audi Hull were bought by JCT600 three years ago from Gilder Group.
Mark Taylor, group property director at JCT600, said: "We were aware that the business had outgrown the existing premises and needed room to expand. It’s been a hugely difficult task finding suitable land in York to develop.
"The redevelopment of the second site at Clifton Moor will enable us to rebuild a new sales facility to match the best car retail sites in the UK."
Designed by SDA Architects of Leeds, the first phase of the building work is anticipated to start in January and work on both sites is due to be completed by the end of next year.