BMW UK is expected to write to network owners of between 10 and 20 dealerships at the end of the month to say they must be sold or closed.

The timing is crucial because BMW has to give a formal six-month termination notice of the franchise agreements to coincide with the end of five-year agreements under Block Exemption rules.

AM understands that BMW has privately told those dealers who will not be continuing with the brand. BMW has conducted a rigorous review of the whole network and it is believed some dealers are already negotiating to sell their outlets.

It is thought that Pendragon will lose some of its 11 BMW sites. It has two clusters – one in the north of England and the other in the south.

One BMW dealer said: “We believe BMW has based its review on whether its franchise holders are performing as effectively as they can.

“There appears to be no leaning towards or away from the plcs or smaller groups. It comes down to how effectively companies are working for BMW.

“Those of us growing will not mind if BMW loses a few of its retailers who make a decent living in a territory where sales could grow with the right person.”

Speculation continues among BMW retailers about the scale of the reshuffle. One said he believed eight sites would change – another 18. There has been persistent industry speculation that up to 20 sites will be sold, absorbed into an adjoining BMW territory, or closed with a view to possible redevelopment.

Many BMW dealerships are in urban areas where land values are high. Another retailer told AM that he believed some BMW sites would be allowed to “wither”, with another dealer expanding into the territory. Some dealerships “will be quietly sold” to someone else in the network, he added.