The move follows IDOM’s recent purchase of Andrews & Wallis dealerships in nearby Essendon Fields.

IDOM’s Australian subsidiary, IDOM Automotive Group, has replaced Rex Gorell Group as operators of the business.

The Geelong-based Rex Gorell Group had stepped in to run Werribee Volkswagen, which was without an operator after legal action mounted by Volkswagen Group Australia (VGA) in September 2017.

The legal case, involving VGA and its finance arm Volkswagen Financial Services Australia, aimed to remove the then joint owners of Werribee Volkswagen – Bo (Nick) Zhao and John Tofari – for what VW alleged was a breach of the franchise agreement.

The owners had bought the business for $2.8 million in June 2017.

Mr Tofari, who had a 20 per cent share in the Werribee Volkswagen business with majority shareholder Mr Zhao, was cleared of any misconduct by the court action and by VGA.

But as a result of the Supreme Court of Victoria decision in October 2017, VGA replaced the owners with new franchisees, the Rex Gorell Group, which has a Volkswagen franchise in Geelong.

This month, IDOM became the new owners of Werribee Volkswagen, renamed by the Rex Gorell Group as Gateway Volkswagen.

In a statement to GoAutoNews Premium, VGA general manager of network development David Stone said: “While Rex Gorell continues to represent the Volkswagen brand in Geelong, VGA is delighted that IDOM has agreed to make Werribee part of its growing portfolio in Victoria.

“We can be confident that IDOM will provide the investment required to grow the Volkswagen business in this important growth area of Melbourne,” he said.

In October last year, IDOM paid about $70 million for Andrew & Wallis Group, based in the Essendon Fields airport auto retail centre in Melbourne’s north. It added seven franchises – Honda, Mazda, Toyota, Jeep/Chrysler, Alfa Romeo, Fiat and Isuzu Ute – to IDOM’s portfolio.

The franchises are on four sites in Wirraway Road, Essendon Fields: Essendon Honda, Essendon Mazda, Airport Toyota, and Essendon Jeep & Chrysler and Essendon Isuzu Ute on the same site.

The purchase comes three years after IDOM paid about $121 million for 67 per cent of WA-based DVG Automotive Group, the second biggest retail operation in the state after Automotive Holdings Group (AHG).

The CEO of IDOM Inc’s Australian subsidiary, IDOM Automotive Group, Takayoshi Udagawa, told GoAutoNews Premium at the time that IDOM’s plan was to broaden its new-car dealership network as part of its national growth strategy.

By Neil Dowling