Palmers will open an Alfa Romeo and Peugeot dealership in Hemel Hempstead in October, to replace its St Albans site, which has been sold to Tesco.

The 18-car showroom will also feature another, as yet undecided, franchise. Another option is to own-brand a used car operation.

Danny Palmer, Palmers managing director, said the sale of the site came at a good time: “With the 2010 BER, I don’t think the St Albans dealership would have reached Peugeot’s standards.”

The new site, in which Palmer invested £750,000, will be “a destination dealership” with a café, internet and TV, similar to Palmers’ Peugeot and Citroën showroom in Watford.

Palmer said he expected his customers to change with the move, but that 40% of St Albans customers came from Hemel Hempstead already.

The 1.5-acre site, which was formerly a used car operation run by Masterdrive, has space for 100 used cars outside and a 16-bay workshop.

An Alamo rent-a-car franchise is already part of the building and this will continue, along with a fast-fit centre, which Palmers has taken on and will brand ‘Service Express’.

A demonstration model of Alfa Romeo’s B-segment car MiTo is due in the autumn, which Palmer said was “very well-timed with the opening of Hemel Hempstead”.