Reg Vardy has taken on the Citroen franchises for Hartlepool, Middlesbrough and Stockton from South Cleveland Garages, which went into receivership last month.

However the group, ranked third in the AM100, is not buying South Cleveland’s sites or guaranteeing to employ its staff. Instead, it is opening its own outlets in the area.

The Stockton franchise will start trading within a week in the showroom of Vardy’s former Fiat dealership on the Mandale Industrial Estate, which closed a month ago. At Hartlepool, Vardy owns a showroom in Brenda Road which was leased to South Cleveland’s Peugeot franchise.

This will reopen as a Vardy Citroen outlet by the end of the year, increasing the group’s Citroen representation to seven dealerships.

A spokesman for Vardy says this will create 50 to 60 jobs, adding: "Candidates from South Cleveland are invited to apply for vacancies." The group is not interested in buying any of South Cleveland’s sites.

South Cleveland’s Peugeot franchise for Hartlepool has been acquired by Williamson Peugeot, which already represents the brand in Darlington and Spennymoor.

Managing director Simon Williamson has taken on 17 staff from the former Hartlepool Peugeot business and hopes to open within days in the former South Cleveland Citroen showroom.

"It will house us while we look to build a new dealership, but that probably won’t be realised for a year or so. We’re looking at five plots at the moment, and trying to get that done as soon as possible," he says. "We’ve been looking for somewhere to expand to for a couple of years. This opportunity came out of the blue."

Williamson, which celebrates its 65th anniversary this year, had also hoped to gain the Middlesbrough Peugeot franchise, but this has gone to Simon Bailes, joining its existing Peugeot sites in Northallerton, Stockton and Guiseborough.

The future of South Cleveland’s MG Rover, Suzuki and Mitsubishi franchises is uncertain. Of the group’s 300 employees, 275 have been made redundant so far.