Credit crunch hurting new car sales, says Pendragon

CAR giant Pendragon is warning that uncertain trading conditions look set to continue into 2008 thanks to continuing fall out from the credit crunch.

However, it said that the first three months had been “encouraging” in a trading update today although new car registrations were down by 0.7% for the same period last year.

Group new car sales volumes dipped by around 4%, with new car net profits per unit  better than in the previous three quarters.

Registrations for new Jaguars were down 16% but Pendragon said this was expected in light of the XF’s launch.

Its optimism seems based in used car sales, which are up 2% year-on-year. Strathstone, the group’s luxury retailer, has seen sales rise by 2% helped by the second hand car market.

The UK’s truck market also appears to be holding up thanks to a shortage of supply last year. As a result the group’s Chatfields results are ahead of plan.

However, Pendragon, which bought CD Brammal in 2004 to further boost its expanding empire, remained cautious.

“It is still unclear how large an impact credit tightening and house price falls will have on retail markets for the remainder of the year,” it said.

“The critical metrics of sales volumes and operating profits per unit are trending in a
positive direction and the group is confident of a satisfactory outcome to the
year at the upper end of expectations.”