A VW dealer will soon acquire the Audi franchise for the first time, and in the same area, which Volkswagen UK hopes will end speculation among its retailers that dual VW/Audi representation is barred.

Kevin Rose, Audi UK director, says the contract should be signed by early November: “There is no exclusivity policy, and the Audi franchise is given on merit,” he says.

“We do though want to reduce the number of retail partners to about 40, with three or four sales outlets each, making a total of 120.

“In making that happen, we have decided not to continue with some retailers, and it has meant that some with Volkswagen have lost Audi. We believe a number of retailers do not have the right culture for a premium brand like Audi.

“All our partners know where they stand. Some will grow with us, others will continue with what they have and four or five are under termination. We also have groups asking for the franchise.”

Sheffield-based Gilder Group, which holds only the VW and Audi franchises, has just relinquished Audi in Derby to a retailer which has not yet been named. In return, Gilder has acquired an Audi centre in Doncaster from the Hayselden group, which has Volkswagen in Doncaster (plus Skoda) and in Barnsley.

Garry Scotting, Gilder managing director who led a management buy-out three years ago, says: “By adding Doncaster to our Sheffield centre, which also serves Rotherham and Chesterfield, we have built a south Yorkshire Audi market area. We expect to continue with Volkswagen at Sheffield (where we have two outlets), Rotherham and Chesterfield.”

Gilder has held the VW franchise since 1953, and Audi since 1974.

Bob Tabor, managing director of South Hereford Garages, who has represented Volkswagen and Audi for 30 years, and has both franchises in Hereford, says: “They tend to keep their plans close to their chests but we do not feel any particular pressure. There has been no suggestion that we should give up either franchise.”

VW dealers have been unsettled by a cut in profits and there is hostility towards Paul Willis, VW director in the UK, who has also rejected claims that dealers cannot represent both marques in the same town.

Retail executives who have worked with VW and Audi seem to prefer Rose’s technique in explaining and seeing through group policy (“Kevin has a better bedside manner, but Paul also talks straight,” says one). Willis says accusations of bullying dealers are upsetting.