MG Rover has struck a deal with Virgin Cars to supply vehicles direct for sale over the internet. The landmark agreement means Virgin's website will offer buyers fleet-style discounts of up to 20 per cent off the UK list price of models.

A selected number of dealers will be responsible for delivering cars bought over the web to Virgin's customers. They will also take on the aftersales business - under the agreement Virgin will not use its own '@ your service' suppliers. MG Rover denies the move will encourage customers to side-step dealers.

“This is about giving our customers more choice. By teaming up with Virgin Cars, they now have the option of purchasing online or through one of our many dealerships,” says Kevin Howe, MG Rover chief executive.

Typical deals include £2000 (10 per cent) off the £19,995 list price for a MG TF 160 with delivery within 14 weeks. Drivers can save £4700 (19 per cent) on a Rover 75 2.5 Connoisseur and have it delivered within four weeks.

Virgin Cars is poised to strike more direct supply deals with manufacturers, following the revisions to block exemption. “Direct car supply arrangements are an important focus in our future business strategy,” says chief executive Ian Lancaster.

The company expects to reveal details next month on its overdue car showroom, originally slated to open in the south-east during the summer. It has now identified a site after “widening the search away from the south-east” and hopes to open early next year. It is likely to be the first in a network of showrooms, giving Virgin Cars a presence in key sales markets