Big car price cuts at the check-out

SUPERMARKETS chain Morrisons has moved into cut-price car sales, offering customers savings of more than £3,000 on the latest models.

Wm Morrison, which has 84 stores, has linked up with the Lookers dealership, which represents most major manufacturers including Vauxhall, Nissan, Rover and Renault. Lookers will have 'car shops' in the supermarket chain's stores, where customers can browse the internet for the make and model they want.

The first Look4cardeals.com shops have opened at Morrisons stores in Oldham and Bradford. A third will be launched in Sheffield soon and others are set to follow.

The tie-up represents the first time a supermarkets chain has specifically moved into car sales. Tesco and Sainsbury's offer car loans and leasing. Lookers is one of the biggest vehicle dealerships with an annual turnover of more than £700m and profits last year of close to £15m.

It is believed the partnership will give Lookers the financial muscle to negotiate attractive discounts from car manufacturers. Some of the deals on offer as a result of the link-up include £3,225 off the list price of a Rover 75 Club SE CDT and £3,500 off a Saab 9-3 TDi SE.

Lookers chairman Fred Maguire said: 'Customers will benefit from the latest technology to browse a full range of stock at great prices. And they will know they have the services of one of the UK's largest car retailers in the background. That means no problems with part-exchanges, delivery, after-sales and servicing. We can even offer test drives at home, at work or at a location to suit the customer.'

The move by the supermarkets chain is set to pave the way for a revolution in the way cars are bought and sold in Britain and the rest of Europe. The initiative comes as the EU prepares to amend the so-called block exemption system which allowed car-makers immunity from normal competition laws.

Previously, manufacturers set up networks of tied dealerships and consequently were largely able to fix prices of new vehicles. The arrangement also allowed dealerships to control follow-up maintenance and repair services, allowing big profits to be made in this sector.

The relaxation of the system means that dealerships will be allowed to sell a wide range of makes and models, rather than being tied down. At the same time they will have much more flexibility on the price of vehicles. Dealers will also find it easier to set up showrooms abroad in competition with the dominant manufacturer.

Industry insiders say prices could drop by up to 12% by the time the measures come into full effect two years' from now.