UK new car market has reached its ‘natural level’ says motor dealer

ONE of the UK’s biggest motor dealers has said it believes the new car market in the UK has reached its natural level – despite sales being above expectations.

Midlands-based Pendragon, which operates the Stratstone and Evans Halshaw dealerships, said its prior year interim and year end results had both indicated new car registrations in 2015 would run at between 2.5 to 2.6m units per annum.

However, it said in a Q3 trading update that due to a better-than-expected trading environment the situation had now changed.

“After analysing September registrations we are expecting 2015 annual registrations to be over 2.6m units.  Year to date registrations to September 30, 2015 increased by 7.1% year on year, with retail registrations increasing by 2.4%. 

“We believe the UK new car market has reached its natural level,” it said.

New gross profit increased 5.3% on a like for like basis, as a result of the continued improvement in the new vehicle market.

Overall in the quarter, underlying like for like profit before tax increased by 6.6%.

However, aftersales continues to be the company’s most profitable division with gross profit growing by 3.8% in the quarter on a like for like basis. 

Trevor Finn, Pendragon chief executive, said: “We continue to go from strength to strength after another strong quarter across our key sectors of aftersales, used and new.  We continue to deliver on our winning strategy of offering choice, value, service and convenience to our customers and we are ideally positioned to gain from favourable underlying market conditions for aftersales, used and new. 

“The performance of the group is in line with expectations for the full year, which were upgraded in August.”