THE Royal Bank of Scotland's £110 million acquisition of Dixon Motors will boost the dealer group's fleet activities.

'This deal was not about consolidation in the retail sector,' Dixon Motors boss Paul Dixon said. 'It was about two partners linking up. It was about us not having to trawl around the financial world to get funding, and no more lengthy negotiations with bankers.'

RBS subsidiary Lombard had already been a partner of Dixon for several years. Lombard's successful Direct Line insurance operation had joined with Dixon to form an online car sales operation called Jamjar. Dixon also supplied cars to Lombard for its contract hire and leasing businesses.

'We have been partners for a long time,' said Dixon.

'Lombard had issues about achieving the right service levels to its fleet customers, and with the disposal of used cars.

'We were the perfect partner – we could supply them with cars and take cars back at a later stage.

'Lombard de-fleets 20,000 cars a year. Now we have access to that stock, which is good two-to-three year old product.

'This is an area where we have always been very strong. We will play a big part in Lombard's fleet business. With de-fleeted cars in general, there are too many stages through which the cars have to go. All that adds costs.

'The deal also gives us access to funds. We no longer have gearing restraints. 'We have a five-year financial plan that means we have a sound base on which to build the business.'

Dixon's innovative vehicle preparation centre at Thorne, near Doncaster, will be at the heart of the operation to handle ex-Lombard cars.

Dixon added: 'Cost will be taken out of the supply and de-fleeting process, which will free up resources and benefit customers.'