The company, whose subsidiary Inchcape Australia also handles distribution of Subaru, Peugeot and Citroen brands in this market, also last month sold some of its retail automotive businesses in Australia that went to separately to Sime Darby and Nick Polites.

The sell-offs are part of a strategy by Inchcape to quit 16 dealerships to raise the equivalent of $275 million for future use.

In an announcement to the London Stock Exchange, Inchcape said it had sold Inchcape Fleet Solutions (IFS) to Toyota, a major customer of the business and Inchcape’s oldest OEM partner, for $A183 million.

Inchcape plc group CEO Stefan Bomhard said in a statement to the exchange: “This transaction is a further demonstration of strategic progress and focus on our core distribution activities which generate 90 per cent of group trading profit.

“We are pleased to have been able to further streamline our UK retail market activities by selling IFS at a good valuation.

“We remain focused on our ‘Ignite’ strategy which frames our operational excellence initiatives, has driven 10 distribution deals since 2016, and sets the foundations for capabilities that will enable us to position Inchcape well for the future,” he said.

The staff were transferred to Toyota.

Inchcape has sold five Volkswagen car and van retail franchises and three Audi dealerships  since August. These sales were made to Group1, Motorline and Harwoods Group (Crawley Audi) in the UK.

It also sold six Trivett and Thomson dealerships in Australia and three in China. The Chinese sale ends Inchcape’s financial investment in that country.

Inchcape said that its UK retail dealership business remained strategically important and said that the IFS business was a separate issue. IFS leases fleet vehicles and provides fleet management services to B2B customers, including Toyota.

In an interview with Automotive Management, Mr Bomhard said: “The scope of the business means there is limited synergy with Inchcape’s UK retail dealership business, where Inchcape acts as a franchisee of brands including BMW, Mini, JLR (Jaguar Land Rover), Mercedes, VW, Audi, Porsche, Toyota and Lexus.

“The UK retail dealership business remains strategically important to the group, where Inchcape is a top-five partner for key OEM partners, supporting the expansion of group distribution contracts since 2016,” he said.

Inchcape currently has 113 automotive retail outlets in the UK.

Asked about the disposals just a week prior to the sale of the eight dealerships in the UK, Inchcape Retail UK chief executive James Brearley told AM: “We carried out a review of our business towards the end of 2018, in light of general market trends and specifically (new fuel testing procedure) WLTP, and it is clear that where we had a density of representation and we are able to bring certain services together we make in improved profit as a result.”

IFS, which has a fleet of 20,415 cars and vans, has been a profitable division of Inchcape and in the 2018 calendar year reported revenue of $110 million and a trading profit of $16.5 million. Toyota Financial Services has a fleet of 12,379 vehicles.

The stock exchange announcement by Inchcape said proceeds of the sale of its disposals will follow Inchcape’s policy of focusing on organic and inorganic growth, with any surplus cash returned to shareholders.

Inchcape earlier this month said it would sell its three retail sites in mainland China to China Yongda Automobiles Services Holdings Limited for net cash proceeds of $100 million.

It said that Inchcape does not have a scale presence in China and “as a retail-only market these assets are less strategic to Inchcape’s global growth strategy”.

“China has been Inchcape’s only exposure to retail-only operations in Asia and this transaction will see the group exit China,” the company said.

The sites are Lexus in Shaoxing, Porsche in Nanchang and Mercedes-Benz in Jiujiang.

“Their disposal will enable Inchcape to refocus its regional resources on the more attractive distribution markets,” the company’s statement said.

“Prospects for Inchcape’s distribution business across Asia remain highly attractive and the region a key contributor to the group.”

By Neil Dowling

Inchcape Fleet Solutions HQ