The Ryland Group is confident its Mercedes-Benz network will grow “modestly”, but with increased profit potential despite the near-certain loss of its outlet in Manchester.

In a statement, Peter Whale, group chairman, said today that MB-UK has indicated its wish to take over the city site, as part of a nationwide strategy to take outlets under its direct control.

Mr Whale says, however: “Our current belief is that whilst the nature of the group's Mercedes-Benz investment will be subject to some change, it will eventually expand modestly in overall terms. There should be significant synergies and thus enhanced profitability from the implementation of their market area plans.”

Mr Whale said trading for the first quarter of the year was ahead of both budget and last year.

“Our new car volumes, particularly in specialist and luxury marques have grown faster than the national average, although recent supply constraints may dampen growth in the immediate short term.

“Margins in all areas have strengthened as a result of a higher retail content of sales and a significant decline in the deflationary pricing pressures so prevalent last year.”