DaimlerChrysler UK has acquired seven Lex Autosales outlets for £17.95m as it gears up to handle greater used car volumes over the next five years - a result of booming new car sales.

A spokesman said an 18-month DCUK project had identified that the dealer network would be "unable to satisfy the future level of demand for nearly-new and used cars". He added: "The move is designed to capture that market and supplement the dealer network."

DCUK plans to rebrand the centres - Birmingham, Bristol, Chelmsford, Croydon, Hemel Hempstead, Poole and Waltham Cross, Herts - as Mercedes-Benz stores. It intends to acquire more outlets, particularly in North England and Scotland, and has not ruled out building greenfield sites. One analysts described DCUK's action as a "slap in the face" for the Mercedes dealer network.

But he added: "Dealers only have themselves to blame - they've concentrated on new cars and don't have a used culture."

John Bissett, former DCUK general manager used vehicles, will head the network. Each outlet has preparation facilities, but dealers will carry out all servicing and warranty work.

Cars will be sourced from PCPs, contract hire, rental and leasing firms, removing units traditional sold through auction.

Dermot Kelly, Mercedes-Benz director passenger cars (left), pointed to Mercedes' recent new car sales growth in the UK - volume has risen from 35,813 units in 1996 to 62,368 last year, an increase of 74%.

"Over the next few years there will be a substantial increase in the demand for used cars," he said. "This new business will enable us to maximise that potential growth."