As part of its £200 million strategy to revamp and consolidate the UK Mercedes-Benz Passenger Cars dealer network, DaimlerChrysler UK Retail Ltd has announced the sale of its Milton Keynes outlet, Mercedes-Benz Portway, to UnitedAuto Group, Inc.
UnitedAuto is a Fortune 500 automotive specialty retailer which operates 127 franchises in 19 American states, Puerto Rico and Brazil. It is a subsidiary of Penske Corporation, a US-based, privately-held diversified transportation services company.
Penske Corporation has an ownership share in Ilmor Engineering, which provides the power for the West McLaren Mercedes Formula One team.
Dermot Kelly, Director Mercedes-Benz Passenger Cars and smart said: “We are delighted to welcome UnitedAuto into our network. Our retail strategy is designed to improve the service we give our customers, and UnitedAuto#;s experience will undoubtedly help here.
“The company has experience in a large, mature market, and is well known for approaching business challenges with innovative new ideas. Of course, all of our retail partners are experts in UK car retailing, so the exchange of best practice ideas will benefit everyone.”
The new retail network will comprise independent franchised businesses, and sites in London, Birmingham and Manchester owned by DaimlerChrysler UK Retail Ltd. The Milton Keynes Market Area will form part of this franchised sector, which comprises some 70 per cent of the new network.
Last year, British Mercedes-Benz dealers fought against the planned termination from end 2001 of their franchise agreements, as DaimlerChrysler UK set about reducing its Mercedes network from 138 stand-alone dealers to 35 regional centres.
In a compromise, DC agreed to let dealers stay in business until as late as June 2003 with an offer of a ‘territory release payment’ (read ‘compensation’) of one or two years’ profits, according to whether they stop trading in June 2002, December 2002 or June 2003.