A project team is believed to be making the final refinements to an online car sales programme to be launched soon by Tesco. An executive of an existing motor retailing online company said: “Tesco is close to an announcement”.

A Tesco spokesman said: “We have been seriously looking at selling cars for about a year. Other than that we can say nothing else at the moment.”

A report by the E-insight consultancy forecasts Tesco will be the winner in the supermarket online food shopping sector, expected to be worth £30bn by 2008.

Pendragon chief executive Trevor Finn this week told Automotive Management he was in talks with an unnamed third party about the group's Tins website which cost £800,000 to set-up and launch. He said it was not Tesco.

Mr Finn, like other leading dealer group bosses, is looking for ways of combining a network of dealerships and online opportunities.

“We need to leverage our expertise and expand this area of the business,” said Mr Finn. If the talks were successful, Pendragon could “increase its reach in the market”.