Reg Vardy, the UK's second biggest automotive retailer, is planning to open a chain of multi-marque repair shops in major cities following the introduction of new European block exemption regulations.

A limited national network could follow if trials at a pilot centre in Leeds are successful. Under the revised rules, car sales are separated from car service, which means franchised and independent workshops can apply to manufacturers to become approved repairers.

Many have been put off because of the high cost associated with tooling up and training staff, but Robert Forrester, Reg Vardy's finance director, says that although each repair shop will cost upwards of £1m, the group will benefit from increased market share.

“The new rules are both an opportunity and a threat to us. The threat is that a repairer could gain authorised status and set up a business in the same areas as our franchised dealer,” he says. “The opportunity is that we can set up our own Reg Vardy service only-sites around our dealerships to look after our customers' cars.”

Forrester says that if this service model works it would be rolled out in major city centres where Reg Vardy already has franchises. He promises that any new centres would offer the same Vardy experience with a strong focus on customer service and satisfaction.

Manufacturers would be expected to welcome a dealer initiative improve inner city repair services but research by credit rating agency Standard & Poor warns a new wave of repairers could threaten manufacturers' profits from spare parts.

The new regulations mean that authorised repairers will be allowed to shop around for cheaper replacement components.