The Co-Operative Motor Group has confirmed it is looking to reduce its network of 11 down to six locations.
It currently has 18 locations with a new car franchise, four aftersales sites and one bodyshop.
The AM100 group is looking to retain its Land Rover sites in Bradford, Leeds and Guiseley, as well as a Mazda site in Guiseley and Fiat, Nissan and Peugeot in Keighley and Renault authorised repairer, Nissan, Chrysler and Jeep in Nottingham.
Vertu Motors is already in discussions to buy three sites.
Rumours had been circulating that the Co-op was looking to exit motor retail completely.
A spokesperson for The Co-operative Motor Group told AM: “I can confirm that we are in talks with Vertu about the proposed sale of our Bradford (Renault and Nissan), Derby (Renault, Fiat, Nissan, and Mazda) and Ilkeston (Nissan, Peugeot and Renault) motor dealerships.
“As with any large organisation, we keep our portfolio of businesses under continuing review, and these motor dealerships no longer fit our long-term strategic objectives.”
The Co-op will exit the Renault new car franchise if the sale to Vertu goes through.
The Vertu transaction is subject to agreement of contract terms, due diligence and various third party approvals, therefore “there can be no certainty that the potential transaction will proceed”.
The Co-operative's interim results for the 26 weeks ended June 30, 2012 show that motor sales were down 5.3% to £135.9m, with profits also down 8.5% to £1.5m.
However, its Land Rover dealerships have performed well with sales up 22.6% and profits up 13.1% during the period.
The three Co-op sites (yellow) Vertu (black) is looking to buy, demonstrating how the acquisitions would complement its existing network and in-fill between Barnsley and Stockton-on-Tees. (Source: AMi)
Key elements of The Co-operative Motor Group's recent financial performance (yellow) demonstrating the challenges it has faced, measured against the AM100 average (black).
Between 2006 and 2010 return on sale varied from -1.8% to 0.2%; it made an operating profit of £310,000 in 2010 following five years of losses and gearing has been above 90% for more than 10 years. (Source: AMi)