MERCEDES-Benz has bought the Lex Autosales network from Lex Service as part of a bid to launch a nationwide network of used car sales centres. The £17.95 million purchase is part of an ongoing investment in retail business designed to strengthen the company's ownership of the lifecycle of its cars and will include disposal of returned stock from rental companies.

Estimates suggest manufacturers retain just 20% of the profit generated by a car during its road-going life through new car sales. Many are working to retain more of the profit through in-house leasing companies, but retail centres will also bring new revenue streams.

The sale of Lex Autosales covers seven sites and will include the transfer of 176 staff from Lex to Mercedes-Benz. As well as ex-rental stock, courtesy cars, demonstrators and long-term test vehicles, sales could extend to taking Mercedes-Benz stock from debis Car Fleet Management.

John Bissett, formerly general manager of used vehicles at DaimlerChrysler UK, will head up the new operation. The purchase will allow the manufacturer to create the 'critical ingredients' needed to meet the future needs of the used car market, according to Dermot Kelly, director of passenger cars for Mercedes-Benz.

He said: 'Over the next few years, there will be a substantial increase in demand for our used cars which our dealer network cannot satisfy alone, as we are selling more than 60,000 new cars a year in the UK.'

The purchase of the site follows Lex Service's decision to drop its network of used car stores because it does not fit in with the RAC's retail strategy of providing individual motoring solutions.