AA, Inchcape in car sales tie-up

THE Automobile Association has chosen independent motor group Inchcape as its partner in its push toward becoming a dealer in new and used cars. The motoring organisation, owned by British Gas group Centrica, has signed a 70-30 joint venture with Inchcape that will be fully launched in the New Year. Inchcape is putting an initial £4m into the venture.

Chief executive Peter Johnson said: 'This is being done on a fee basis and we would not expect a dramatic effect on revenues in the first 18 months. But two years out, we see a big volume opportunity and significant revenues.'

The deal is the latest move by Centrica chief executive Roy Gardner to extend his group into new fields in a bid to cross-sell as many services as possible to its customers. As well as its energy and AA motoring and finance interests, the group includes the Goldfish credit card joint venture with Lloyds TSB.

The AA has already dipped its toe in the used car market with a venture with Yes Car Credit which offers motor finance for people with no or low credit ratings. AA managing director Roger Wood said of the Inchcape tie-up: 'We can expect it to influence consumer attitudes to owning and running a car.'