Inchcape has given a profit warning for 2009, stating that its sales declines would be wider than previously anticipated.
Inchcape, which in October lowered its profit target by 20%, said the decline in new car sales accelerated in November in most parts of the world and that it would be difficult to forecast its results with certainty.
The company said that despite weaker trading conditions in many of its key markets, it expects to report underlying results for 2008 in line with its amended expectations.
Inchcape said in a statement to the stock market: "In most of our markets we now expect more substantial sales declines than previously estimated due to the global recession and significant reduction in credit availability."
The group said it expects the Russian market to decline further in 2009 due to an increase on duty on cars and the likelihood that a number of manufacturers will change to US dollar pricing of vehicles. It added that it was in talks to replace its wholesale and retail finance facilities in Australia.
Inchcape, which has operations around the world, said like-for-like group sales for the last 11 months were down 4.9% in constant currency terms but up 3% in sterling.
The group said it was taking action in order to restructure its European businesses. As a consequence, the total restructuring cost for 2008 will now be £85m compared to £75m as previously reported. Inchcape believes the annualised benefit from the restructuring is expected to increase from £50 million to approximately £55 million.
Group net debt reduced from £570m at September 30, 2008 to £540m at November 30, 2008, with £1,035m of committed facilities available to the group.
Andrė Lacroix, Inchcape group chief executive said: "Despite weakening trading conditions globally, we expect to report underlying results for 2008 in line with our previous expectations.
“The unprecedented and rapid downturn faced by the car industry around the world will impact our results in 2009.”