Dealership chain Lookers has bought a Staffordshire car supermarket for £12 million as part of its plans to ride out a downturn in the car market.

Overall new car sales across the industry have fallen by four per cent in the year to April, Lookers said yesterday.

But the Manchester business, which has three Vauxhall and three Honda showrooms in the Midlands, said the deal to buy Ian Shipton Cars in Burton would broaden its revenue streams.

IS Cars is a well established and successful operator in the independent used car supermarket sector and has been trading for more than 30 years.

Lookers is paying approximately £12 million for the trading name and assets of the business which include a seven and a half acre site from which it sells 7,000 vehicles per year.

Finance director David Dyson said: "There is quite a significant amount of property and high value of used cars on the site, approximately 750 cars.

"We believe the used car market is three time larger than the new car market and if the new car area is softening then it usually picks up with the used cars.

"We always felt we did not sell the right number of used cars. Plus the used car market is not cyclical like with new cars where you see increased sales with the new registrations every March and September. This site will make money every month for us."

Mr Dyson said that although the new car market as a whole was down, Lookers itself had managed to buck the trend and increase sales by eight per cent.

The company pulled out of its four MG Rover dealerships last year, an exit which cost it £2.8 million.

Mr Dyson said the costs it would have suffered following the collapse of the Longbridge car maker had been reduced as a result of its early action.

He said: "It (the end of MG Rover) was something we half expected.

"We thought it was going to happen so we took action accordingly rather than being reactive."