The Mercedes-Benz decision to take control and ownership of all dealerships in the Greater London, Birmingham and Manchester areas, together with a significant price increase for right-hand drive 'grey' imports sourced from European dealers, effectively means price control by the manufacturer,' claims Alan Pulham, franchised dealer director of the Retail Motor Industry Federation (RMI).

"In my view, this has to be extremely bad news for Mercedes customers throughout the UK. Inter-dealer competition will become ineffective and the lower prices sought through the Government's DTI [Department of Trade and Industry] order are unlikely to be realised," he said. UK vehicle importers were recently ordered by the government to offer retail dealers the same discounts for volume purchases available to fleet buyers.

Independent Mercedes dealers, all of whom have recently received termination notices effective in a year or so, plan legal action with the Retail Motor Industry Federation's assistance, Pulham added.