MAXWELL MOTORS, the Dublin BMW dealer, is to end its franchise with the premium car brand.

The Blackrock-based firm, which is the German marque's second biggest dealer in Dublin and one of its top five outlets in the State, informed staff of the decision yesterday morning. The current franchise deal runs out on September 30th.

The move is the first of several major changes expected in BMW's Irish dealer network. Michael Nugent, sales director of BMW Ireland, said all its dealer contracts had been reviewed and the national distributor was in the process of renewing contracts and reviewing new applicants.

According to industry sources, other BMW dealers are likely to leave the network by October. New dealers are expected to be appointed to replace them.

Peter Pierse, chairman of Maxwell Motors, said: "This decision has been made in the light of the conditions set down by BMW for such a renewal and on a review by the board of the operation of the franchise over the recent past."

The dealership was looking at alternatives and had no intention of leaving the industry, according to Pierse. He said it would stay in its current site and would honour all warranties and agreements.

While he would not be drawn on alternative franchise opportunities, Pierse said he expected "fairly dramatic changes" in the motor industry, and tougher trading conditions. Options include taking a rival franchise or entering the premium used-car market.

Maxwell Motors has been a BMW dealership since 1989 and was one of its first single-franchise operators in Ireland. Last year, it sold about 600 BMWs and 200 Minis.

Apart from Maxwell Motors, the BMW network has two dealers serving south Dublin: Murphy Gunn and Frank Keane Motors.