Glen Henderson, which has held the Mercedes-Benz franchise in Ayr for 25 years, will continue until June 2003. Reg Vardy plc, which has two outlets in Glasgow, must wait more than 18 months to pursue its planned growth in the west of Scotland.

Mr Henderson said: "We're proud to have represented Mercedes for so long by giving our customers outstanding service. We have never held a larger customer bank. "I have assured our staff we are not going out of business and will look for opportunities with another brand."

He said the Mercedes dealership was on a three-acre site which had never been fully developed.

Mr Henderson, who trained as an engineer, also has a Mercedes commercial vehicles dealership and a bodyshop in his group. (November 9, 2001)