FEARS that Chinese car makers would swamp the Australian vehicle market with shiploads of cars may have been premature but a new trend may be emerging; cashed-up Chinese conglomerates are embarking on direct purchases of international automotive retail businesses.

In less than 12 months, diverse Chinese company Lei Shing Hong (LSH), the same company that recently announced plans for a five-storey waterfront Mercedes-Benz dealership at Breakfast Creek in Brisbane, has bought 51 Mercedes-Benz dealerships in three countries from Daimler AG.

This includes two in Australia and 40 in Germany. This month the Hong Kong-based company added nine dealerships in the UK cities of Birmingham and Manchester that employ 600 people.

LSH, the world’s biggest Mercedes-Benz retailer, now controls 190 outlets in total. It already owns Mercedes sales operations in China, South Korea and Cambodia. It also has Porsche outlets in South-East Asia and is a major Caterpillar distributor and dealer in the same region.

Daimler established the Mercedes-Benz Retail Group of factory-owned stores more than a decade ago as real estate costs in London, Birmingham and Manchester boomed in the 1990s. This made it difficult for dealers to operate with such high rental overheads.

Daimler stepped in and established 18 retail sites, eight used car sites and 12 smart centres in those three cities.

Mercedes-Benz Retail Group says that the sale of nine of the 18 Mercedes-Benz dealerships is part of “a planned reduction of the car maker’s exposure to the retail and property markets” but added that it did not indicate that the company would sell all its retail operations.

A company spokesman told Automotive Management (AM) Online: “This is very much a one-off deal with an established and well-respected business partner and comes as part of a European project and a new strategic plan for sales and aftersales Europe”.

LSH last month announced it would build a five-storey autohaus-style Mercedes showroom at Queensland’s Breakfast Creek wharf site in the Brisbane suburb of Newstead.

This was in addition to its purchase in 2015 of two Mercedes-Benz dealerships – one in Alexandria, NSW and the other in Fortitude Valley, Queensland – from Mercedes-Benz Australia/Pacific. It leaves the local arm of the car maker with one company-owned dealership in Melbourne and its Airport Express service centre.

The proposed Newstead dealership – which has been approved by Mercedes-Benz Australia/Pacific – is at the entrance to the Brisbane CBD on a major transport route from the airport.

As reported by GoAutoNews Premium last month, when completed next year, it will house showrooms, a 539 square metre automotive museum, staff training centre, shops and cafes, rooftop restaurant, dining and function area, and a garden pavilion.

LSH made its first foray into Australian property in February 2015, buying an office building on Adelaide Street in Brisbane for $45 million.

It followed up with the purchase in June 2015 of a 7000 square metre property and showroom on Wickham Street in Fortitude Valley for about $40 million.

The purchase of the Breakfast Creek land this year cost LSH $26 million.

By Neil Dowling and John Mellor