Callaghan Motors has revealed it purchased the old Calco Timbers site in west Warrnambool last week and yesterday outlined a five-year plan to relocate from the city centre to Raglan Parade.

The 20,000-square-metre Calco site, originally a drive-in movie park, will be transformed over the coming years although refurbishment of the site is still in the planning stages.

Callaghan Motors dealer principal Steve Callaghan informed staff of the move earlier this week, receiving applause from employees.

He said the Raglan Parade site presented the opportunity to showcase a range of new vehicles but stressed it would be some time before the Callaghan brand appeared in the new location.

"We've struggled with the lack of space here in Fairy Street for about 15 years. It's time to make a change," Mr Callaghan said.

"This is a really exciting time for us. The new site at Raglan Parade will enable us to provide more room for our four brands Holden, Mercedes-Benz, Mitsubishi and Suzuki.

"We're going from a landlocked 6000 square metres in the CBD to 20,000 square metres out in west Warrnambool, so that's a significant increase in space and something we've needed for some time in order to grow the business."

The Calco Timbers site was sold to Callaghan Motors last week at a public auction for $4.4 million. Accountancy firm Coffey Hunt made the purchase on behalf of the motor dealership.

While the change of address may create new jobs, Mr Callaghan said it was too early to spell out specifics, including how the Calco site would be altered.

"There's a process to go through with planning, talking with the manufacturers," he said. "Going from purchasing the site to the grand opening will take a number of years. We're looking at a five-year timeframe roughly."

Mr Callaghan's grandfather Frank started the Fairy Street business in 1933 with businessman Campbell Graham, originally selling brands such as Hudson, Auburn and Terraplane.

Mr Graham died in a racing accident the following year with Frank Callaghan expanding the business as the national economy improved in the late 1930s.

The dealership started its long association with General Motors Holden in 1958 and picked up Suzuki, Mitsubishi and Mercedes-Benz franchises in the 1970s and 1980s.

Mr Callaghan said his family all held Fairy Street in high regard and wanted to ensure the transition to Raglan Parade did not leave a hole in the shopping precinct.

"Fairy Street has been very good to Callaghan Motors and we want to ensure that this site is occupied and maintained," he said.

"That's why the transition will take a few years.

"The lack of space has been a problem for some time. We've expanded into the number of adjacent properties, over into Grace Avenue, but in the end it's a Band-Aid solution.

"Being over in Raglan Parade will give us more than triple the space that we have at the moment."

Mr Callaghan said there had been a warm response to the relocation from staff as well as his father Brian, who operated the Fairy Street site for decades.

"There are many happy memories here. I remember dad bringing us down to the showroom to see one of the very first Mitsubishi Magnas. That would have been in the early 1980s.

"There's a lot of history here, that's for sure."

1933: Businessmen Frank Callaghan and Campbell Graham set up a vehicle dealership at the tail end of the Great Depression.

1934: Graham is killed in a car accident and Callaghan remains the sole operator of the Fairy Street business.

1936: The dealership starts selling Chrysler, Desoto and Plymouth cars.

1940: Callaghan Motors commissioned by the federal government to provide munitions.

1958: Becomes Warrnambool's dealership for General Motors Holden as well as Chevrolet, Pontiac, Vauxhall and Morris.

1964: Frank Callaghan's son Brian starts work at the family business after university.

1965: Callaghan Motors takes over adjoining Ross Motors premises.

1976: Gains its Suzuki franchise, then Mitsubshi five years later.

2004: Brian's son Stephen becomes dealer principal, the third in the Callaghan dynasty.

2015: Old Calco Timber site purchased by Callaghan Motors with work set to begin.

2020: Scheduled date for the dealership to be fully operational from Raglan Parade.