“It's destroying the retail market,” said BMW UK managing director Jim O'Donnell. “This year has been the worst experience we have ever had.” BMW said internet retailers have advertised new cars from the 3 Series range at discounts of more than £4,000, and buyers have been asking franchised dealers to match these prices. O'Donnell implied that, come next September when dealer contracts are to be renewed, dealers found to have supplied the online traders may be left out in the cold. A spokeswoman for BMW said that such a move would not be in violation of the current block exemption. “I don't think that would be going against any block exemption issues,” she said. In the meantime, the carmaker has issued warnings to its 155 UK sites, reminding them of restrictions stated in their contracts as selective dealers. Under current block exemption selective distribution agreements, the dealers are prevented from reselling vehicles to unnamed vendors – they are only permitted to sell to end user customers or other members of the authorised dealer network. The BMW spokeswoman added that all the manufacturer's dealerships were selective, and sellers could only be authorised by BMW directly. BMW UK sales director Tim Abbott stressed the importance of preventing unauthorised sales. “It's infringing the dealer's contractual obligations,” he said. “There must always be a named end user.” The company has requested dealers to issue written confirmations that they are aware of this agreement. While Abbott said he does not have exact figures for the number of cars sold through unauthorised resellers, he believes it could be as many as 4,000 of the new BMWs and Minis sold in the UK annually. The UK is BMW's third largest market after the US and Germany. Abbott predicted record BMW brand sales of 125,000 this year – up from 115,000 in 2006. During the first 10 months of the year BMW sales were up 7 per cent to 102,000 compared to the same period in 2006. Volumes at its subsidiary Mini had exceeded 40,000 – a rise of 23 per cent year-on-year. l See Comment on page 2