Lloyds TSB pays £54m for motor dealership

The high street bank Lloyds TSB yesterday moved into the car retailing business with the £54m purchase of the motor dealership Dutton-Forshaw.

Lloyds said the acquisition of the business, which has 38 franchised dealerships and represents 14 manufacturers, would give it an outlet to sell some of the 70,000 used cars disposed of each year by its contract hire business.

The bank is already one of Britain's biggest car leasing companies with a fleet of about 150,000 vehicles. It also sells cars to retail customers through an internet and telephone-based service called Motor Direct.

The acquisition of Dutton-Forshaw, from the private equity group CVC Partners, follows the strengthening of Lloyds' leasing business earlier this year through the £46m purchase of First National Vehicle Holdings from Abbey National.

Royal Bank of Scotland has also moved into the sale of new and used cars with the purchase of Dixons Motors.

Maurice Rourke, who will be managing director of Lloyds' new Dutton-Forshaw division, said he expected to add another 10 to 15 dealerships and take on some additional brands to strengthen the business.

About 25,000 of the 70,000 contract hire cars Lloyds disposes off each year will be sold through Dutton-Forshaw. The rest will still be sold at auction.

The main brands represented by Dutton-Forshaw are Ford, Volkswagen-Audi, Peugeot and Vauxhall and it sells 21,000 new cars and 14,000 used ones a year. The business was originally part of Lonrho until it was sold to CVC.