Re: Inchcape plc

Guinness Peat Group PLC
15 February 2001



                 GUINNESS PEAT GROUP plc
                            
         LETTER TO THE CHAIRMAN OF INCHCAPE plc
                            
Sir  Ron  Brierley, Chairman of Guinness Peat  Group  plc
('GPG')  has today written to Sir John Egan, Chairman  of
Inchcape plc ('Inchcape'), proposing a number of measures
to enhance shareholder value.

The full text of the letter is attached.

TEXT OF LETTER FROM SIR RON BRIERLEY TO SIR JOHN EGAN,
CHAIRMAN OF INCHCAPE plc.

Dear Sir,

Realisation of Value

Guinness   Peat   Group  plc  ('GPG')  is   the   largest
shareholder  in Inchcape plc, with 14.13 million  shares,
which  represents  16%  of  the  issued  capital  of  the
company.

We  are reasonably familiar with the company's operations
and  financials and we thank you for your  assistance  in
clarifying various aspects for us.

We  note  the announcement of 15 December 2000 that  £100
million cash has been repatriated from Holland to UK  and
it  is  our strong submission that these funds should  be
immediately  returned to shareholders in the  form  of  a
capital distribution of £1 per share.

Notwithstanding  the  merit of the  1999  reconstruction,
which  reduced  Inchcape to a pure automotive  group,  we
question   whether   the  residual  operating   structure
continues  to  be appropriate in view of  motor  industry
developments in Europe and elsewhere in the past year.

Inchcape's  loss  of  Toyota in the UK  must  have  major
significance for the future.  The remaining UK businesses
lack  sufficient  substance  and  cohesion  and  any  new
acquisition  would  have credibility problems  after  the
company's  long  standing and high profile identification
with Toyota.

Mazda   France   (once   highly   profitable)   has   now
disappeared,   the  40%  interest  in  Mazda   GB   looks
increasingly  tenuous  and the UK  dealerships  are  well
represented in number but not in location.

Customer  marketing areas ('CMA's') are steadily becoming
more  important than individual dealerships  but  to  the
best  of  our knowledge, Inchcape has not yet established
its first CMA in any marque. Many of Inchcape's locations
would  complement other retail motor groups and would  be
more valuable to them than in the present ownership.

Maranello  Concessions is a quality niche  business  but,
once  again,  would be of greater value  if  sold  to  an
aggressive entrepreneurial owner.

The  overseas  subsidiaries are largely  a  legacy  of  a
bygone  colonial  era and in reality there  is  no  added
value in UK ownership of diverse geographic locations. It
is  difficult  to see that motor vehicle  dealerships  in
Singapore  in particular, and in Hong Kong and Australia,
are  enhanced by the remote control and added cost burden
of a London head office.

As you are aware, Guinness Peat Group (Australia) Pty Ltd
has  made an approach to Inchcape Motors Ltd with a  view
to  making  a  takeover offer at an indicative  price  of
S$1.65  per  share, which is well in excess  of  previous
market  value. The additional public listing in Singapore
appears  to add nothing to Inchcape plc and if the  offer
is   successful,  you  will  receive  approximately   £66
million, which will be available for debt reduction and a
further return to shareholders.

As  an overall view, we believe Inchcape has an excellent
opportunity  to  obtain the full value of its  individual
components by a controlled program of realisation  rather
than  prolonging the existence of an outdated  model  for
the  sake of doing so. On this basis, shareholders  would
also  effectively  gain the benefit  of  the  capitalised
value  of the company's central costs of £20 million  per
annum  (very  high?)  and eliminate the  continuing  cash
drain of 'Autobytel'.

On  our estimates, there is an ultimate realisation value
of   well  in  excess  of  £5  per  share  available   to
shareholders  in  direct contrast to what  we  anticipate
will  be a disappointing Year 2000 result to be announced
next month.

Last,  but  not  least, we would fully support  fair  and
proper  retirement packages for Board and  management  in
recognition  of a difficult but responsible  decision  to
pursue a realisation program in the best interests of all
shareholders of Inchcape plc.

We  look forward to your response to the proposed initial
return of capital of £1 per share.

Yours faithfully,

Ron Brierley,
CHAIRMAN


Enquiries:

Square  Mile  BSMG                          020 7601 1000
Kevin Smith