NATIONAL fleets fear small franchised and independent dealerships will be forced out of business or will be bought by larger groups following the New Cars Inquiry report by the Competition Commission. With manufacturers being ordered to offer dealers the same volume discount terms as enjoyed by fleets, fears are growing that smaller dealerships will be unable to compete on price and so will close.

Alternatively, small dealers could be bought by larger groups, such as 228-dealerships Pendragon (the UK's largest dealership network), Lancaster which runs 124 dealerships and Reg Vardy which has 85 franchises, who because of their buying power will be able to offer better discounts than smaller dealers, forcing them out of business. However, fleets may find unlikely allies in the manufacturers who would fear the power of a 'Pencaster', it was claimed this week.

Association of Car Fleet Operators chairman Tony Leigh said: 'Smaller dealers could go to the wall because they will not be able to reduce new car prices as much as the big dealers because they will be buying fewer cars. But we could also see the entrance of the big supermarkets into car retailing as they will be able to buy in large volume. For companies which lease, and that is an increasing number, it does not matter who supplies their vehicles, but for small fleets the local personal touch is important. But losing that is one of the legacies of competition.'