Glasgow-based Shields Automotive, struggling for profitability since the MG Rover collapse in 2005, has taken its first Ford franchise and is talking to another manufacturer.

Joe O’Donnell, managing director, said: “We welcomed the chance to take a Ford franchise in Glasgow.

We were on course to make a profit this year until the economic downturn hit us.

This may not be technically a recession, but it feels like one, and it doesn’t just affect the big groups like Pendragon.

"The market is tough.”

Shields, a £65 million turnover group, also has Toyota, Mitsubishi and Peugeot car and LCV franchises, plus Land Rover and Mazda, in Glasgow and Hamilton.

O’Donnell said his group was operating as effectively as possible and had made no redundancies.

He dismissed reports in Scotland that his business is for sale as “malicious”, and said he had endured them since founding Shields in 1994.

Its directors bought Lex Rover in Glasgow, and spent an estimated £10 million on facilities in its first eight years.

In May 2007, Shields Automotive predicted a return to profit following a restructuring programme which cut its operating losses and debt.

The group suffered a £5 million drop in turnover, from £71.6 million in 2004 to £66.1 million in 2005, after MG Rover crashed and recorded a pre-tax loss of almost £1 million that year.

Property sales helped Shields to return a £2.7 million profit in 2006 but turnover went down to £63 million.

Another Scottish dealer, Peter Vardy Ltd, which has Vauxhall and BMW/Mini dealerships, is taking an upbeat approach to the next 12 months despite downbeat forecasts.

Managing director Vardy said: “For groups with good databases, there will be plenty of opportunities. Manufacturers will have to spend a lot on incentives and it is up to their retailers to take advantage of them to win sales.”