Toyota GB is remaining tight-lipped about the reasons why European Motor Holdings sold Toyota and Lexus dealerships to a dealer group operated by a Japanese corporation.

The implication of a statement by EMH is that Toyota initially approved the group as a franchise partner but later changed its mind. None of the three parties is revealing the reasons, however. “We have no comment to make about our dealings with retail groups,” says a Toyota spokesman.

Last July, EMH acquired Smith Knight Fay, which included three freehold Toyota dealerships and a Lexus centre at Stockport, Denton and Macclesfield, all to the south of Manchester.

These businesses, and a Mazda outlet, have now been sold by EMH to RRG Group, which operates Toyota and Lexus retail sites to the north of Manchester.

RRG, owned by Japan’s Marubeni Corporation, paid £13.2m cash and has entered into a lease for the Mazda and Lexus outlets on a large site at Stockport operating other former Smith Knight Fay dealerships.

In a statement, RRG says: “Directors of Toyota GB and Lexus GB have fully supported RRG’s decision to expand its operations.”

EMH’s statement says that at the time of the purchase of SKF, it announced Toyota and Lexus were carrying out a review “to assess the enlarged group’s candidacy for those franchises”.

It adds: “The assessment procedures were successful and EMH was approved as a partner for both franchises and looks forward to having the opportunity to work with them in the future.

However, following discussions with the manufacturers, it has agreed to dispose of the existing Toyota and Lexus franchises in line with those manufacturers’ market area arrangements.”

Chief executive Richard Palmer says EMH has the potential of being awarded Toyota/Lexus franchises in the future. He will now concentrate on BMW, PAG and VW Group brands. A trading update will be made next month, although the board does not expect the disposal to have an impact on the forecast pre-exceptional results.

RRG’s statement says “all operational personnel” will be transferred to its group, which now consists of nine Toyota, three Lexus, four Peugeot and one Mazda outlets, plus two bodyshops. It employs 670 staff in the north west.