The combination of its 33-strong network of showrooms all having been served termination notices by their respective manufacturers as part of the block exemption shake-up in contracts, and industry analysts claiming the market will become more competitive, are believed to be the main reasons behind Arriva's decision. The dealership network is no longer one of Arriva's core businesses.
Chief executive Bob Davies said: 'Our objective will be to maximise shareholder value while securing the continued employment of as many employees as possible. We anticipate that this could involve the disposal of groups of franchises rather than the disposal of the business as a whole.'
In the six months to June 2002, the motor retailing arm made an operating profit of £6.1 million on a turnover of £358 million. The business employs 2,000 people and is worth about £55 million.
Davies stated that the rental arm of Arriva would be unaffected by the sale of the motor retailing business.