Inchcape is understood to be working on a plan to dispose of up to a fifth of its UK franchised dealerships. The decision is part of a strategy to “right size” the group and secure its future. This follows their poor financial results earlier this year.

Sources claim at least five of the firm’s Volkswagen dealerships will be sold to one rival auto retail group. Its also believed three Audi franchises will be sold to Motorline and one Audi (in Crawley) to Harwoods. Inchcape is also looking to dispose of at least three BMW Mini business and one Toyota Lexus operation.

The group has just over 100 franchises in the UK and the sell-off would take them closer to 80.

Inchcape’s most recent results did not reveal full details of its UK operations performance but painted a picture of poor performance across Europe. Retail sales declined nearly 4% in 2018 and trading profit declined more than 70% due to the impact of WLTP emissions regulations. The firm has also taken a £198 million “exceptional impairment” due to reduced margin expectations, according to Inchcapes latest results.

Inchcape said: “We are always assessing a range of opportunities and initiatives in support of our strategy.

“We are committed to informing our colleagues first whenever changes are proposed, and we do not comment on rumour or speculation in the market.”

However, a spokesman for the company added that it was “right sizing” the businesses.