Honda UK plans to give core dealers larger franchise territories as it prepares for a possible “welcome” end to Block Exemption.

John Kennedy, Honda network development manager, said the move was “nothing new” to what other carmakers like Ford had already done.

“We don't intend to own any of the dealers – we do not see ourselves as retailers,” he said.

Honda is assuming that Block Exemption will disappear next year, said Mark Davies, general manager, car division. “We would welcome that,” he said. “If you are the best in your region you have no reason to fear anyone else. We don't care if supermarkets want to sell our products because we believe people will have a better experience with our dealerships.

“We are not sure what will happen with Block Exemption or when but we have to look at it positively. We have to remember that the customer has a choice.”

Honda plans to increase the number of dealers from 194 to 230 by 2004 comprising 195 main dealers – including 47 core partners – with 35 satellites. Among these will be around 100 owners.

Core dealers will have two or more satellites and perhaps centralised service, bodyshop and PDI centres, possibly away from the retail area.

Mr Kennedy said: “Protective legislation has allowed the industry to get away with telling the customer what it wants. The removal of Block Exemption would mean that we have to be better than anyone else at selling Honda cars. “We are used to this, we have other business areas such as motorcycles and power equipment which have had no such protection.”

Dealers are likely to be given access to other Honda products, including motorcycles, marine engines, lawnmowers and all-terrain vehicles.

Honda hopes to boost sales by 15,000 when it launches the Jazz small car in the UK next year.

Mr Davies said the aim was to sell 100,000 units – around 5% market share – by 2006, up from an expected 70,000 this year.