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VW network shake-up continues with proposed Inchcape two-site sale to Citygate

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Inchcape looks poised to sell two more Volkswagen car dealerships as the German car brand’s UK franchises continue to change hands in a series of recent disposals and acquisitions.

Correspondence sent to employees of the AM100 retail group revealed that its Twickenham and West London sites would be sold, subject to contract, to Citygate, suggesting that the Ruislip-based operation “is best placed to drive the future success of those sites”.

If completed, the deal will form the latest in a string of disposals and acquisitions within the Volkswagen UK retail network.

Earlier this week AM exclusively reported on Jardine Motors Group’s proposed sale of seven Volkswagen franchised dealerships and one Skoda site, with Marshall Motor Holdings linked to the acquisition of the businesses by an AM source.

A spokesman for Jardine said that the sale of the VW retail sites in Aylesbury, Harlow, Letchworth, Loughton, Milton Keynes and St Albans, the Volkswagen Loughton Van Centre and Milton Keynes Skoda had not been finalised.

Just last month, meanwhile, Sytner Group cut its Volkswagen representation by a third, selling its Liverpool, Warrington, Stafford and Stoke-On-Trent location to Johnsons Cars ahead of the closure of its facility in Halifax.

Inchcape’s decision to sell the two VW locations inside the M25 follow its disposal of five Volkswagen car and van franchises - in Chelmsford, Colchester, Romford and Southend - to Group 1 back in July.

At the same time Motorline trebled its Audi representation in Kent with the acquisition of Inchcape’s Audi businesses in Maidstone and Tunbridge Wells - following its acquisition of the purchase of Maidstone and Tunbridge Wells Audi business from Inchcape in June last year – as Crawley Audi was sold to Harwoods Group.

In its letter to staff this week, Inchcape revealed that the decision to sell two further Volkswagen franchises had been made following the recent closure of its Cheltenham VW Commercial Van Centre.

It said that the two sites had been identified for sale due to the group’s “limited infrastructure in the south, site performance, and CAPEX (investment) requirements to grow these two businesses.”

Citygate currently has six VW franchises - including two Volkswagen Commercial Vehicles locations - and showed its commitement to investing in the brand's EV future by forging a partnership with Centrica to provide charge points at its dealerships and for its customers.

Speaking to AM back in July Inchcape Retail chief executive, James Brearley, denied suggestions that the AM100 franchised car dealership group plans to close 20% of its UK sites.

Suggestions that the 6th ranked AM100 group’s imminent sale of four Volkswagen and three Audi sites in Kent and the Greater London area was the start of a slimming down of the its new car retail presence in the UK were rebuffed as being “really not the case” by Brearley.

He added: “We carried out a review of our business towards the end of 2018, in light of general market trends and specifically WLTP, and it is clear that where we had a density of representation and we are able to bring certain services together we make in improved profit as a result.

“In the London area, with high land prices and lack of availability, the creation of PDI centres and additional used car footprint is much more of a challenge for us as a business and it was clear that there were business owners in those areas that were better placed to make those operations a success.”

AM has contacted both Inchcape and Citygate for a comment, but has yet to receive a response.

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