Mercedes in bid to avoid court battle over dealerships

DAIMLERChrysler UK and its dealers were in last-ditch talks this week to avert a High Court legal battle over the manufacturer's plan to terminate its Mercedes-Benz franchises. Court proceedings are set to start on July 16, but the dealers and Daimler-Chrysler have issued a statement revealing the last-minute talks.

Alan Pulham, Retail Motor Industry Federation franchised dealer director, said: 'Daimler-Chrysler UK and those dealers involved in the legal challenge are in negotiations. Various alternative proposals have been put forward by both parties and are continuing.'

The battle revolves around the future shape of the Mercedes UK dealer network. To create the new network, the manufacturer has issued termination notices to its current dealer network. It wants to terminate 159 franchises, with only half the current dealers being re-appointed, and set up 'experience centres' in London, Birmingham and Manchester.