Volkswagen and Audi are understood to be splitting their franchises to prevent dealer groups from operating both in the same region.

More than 15 small to medium retail businesses which still hold both franchises face uncertainty as VW’s reshaping of its network took another step forward this week with the £630,000 purchase by Lookers of Massingberd Group’s Northallerton VW outlet. Lookers plans another purchase – its fifth VW dealership – by the end of the month.

A number of dealers have privately told AM that Volkswagen UK wants to stop them holding the two franchises in the same area. However, in an interview, Volkswagen UK director Paul Willis denies the plan.

Massingberd’s two other VW outlets in Harrogate and Otley were sold this week to existing VW franchisee Richard Alexander of Huddersfield, and its Audi Knaresborough dealership was bought by Sytner Group (talks first revealed in AM June 18), which already has nine Audi sites and only one VW. This year, VW has cut ties with Audi dealers Whitehouse and Hartwells, and altered its representation with European Motor Holdings, while Audi ended its relationship with VW-holding Benfield.

Joint VW and Audi dealers now looking vulnerable to losing one of the brands are all over the UK, from London (Alan Day and SG Smith) to Sheffield (Gilders), and from Truro (Helston) to Coventry and Worcester (Listers).

Ken Surgenor, Lookers chief executive, says VW is a target franchise. “We have 13 Renault outlets, and want a lot more VW dealerships to achieve similar economies of scale. We have no Audi but we’re talking to them,” he says.

Michael Massingberd has now left the motor retail business after 41 years.