J Sainsbury, the British supermarkets group, yesterday began offering new cars as well as groceries at its 430 British stores.
The move comes less than two weeks after Mr Stephen Byers, the Trade and Industry Secretary, announced a number of measures to liberalise new car retailing.
These come into effect on September 1st and are aimed at reducing prices by 10-12 per cent the amount by which UK prices are deemed excessive compared with continental Europe.
However, Sainsbury executives said the timing of its "Sainsbury's Bank Drive" venture in partnership with Bank of Scotland was unrelated to the government measures. They said Sainsbury would not be joining a rush by a number of new entrants into car retailing to offer cheap imports or heavily discounted cars obtained through "unofficial" channels.
The partners say that while they are using their bulk buying power to obtain discounts, the heart of the venture is a financing package in the form of personal contract purchase.
The venture, which has been tested at 60 supermarkets since last September, is claimed to offer significantly cheaper financing than is likely to be available through dealers.