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Pendragon looks to aftersales and used cars to drive growth

Pendragon will focus on its aftersales and used car activities to drive its business as new car sales slow.

The Nottingham-based dealer group said in its interim statement that Q3 aftersales margins rose like-for-like by 0.7% and its used car sales in the period where up by 7% like-for-like.

Aftersales is the most profitable part of Pendragon’s business and the group said it had focused hard on coming up with “a package of aftersales initiatives designed to retain customers and improve profitability including service plans and integrated electronic vehicle health checks”.

Pendragon’s year-on-year UK new retail car registrations fell by 23.4% and total new car registrations including fleet fell by 11%.

Retail sales excluding scrappage were up 1.4% in Stratstone and in Evans Halshaw were up 43%. Pendragon said its new car margins have strengthened slightly year to date compared to the first half of this year.

In its interim statement to shareholders, Pendragon said: “While the wider macro-economic environment remains uncertain, we continue to concentrate on the areas of the business where we have the greatest opportunity to improve profitability and reduce debt.

“We continue to focus on the aftersales segment of our activities and growing this area of the business through a package of targeted measures. We believe that used cars should continue to generate stable margins given expectations of a subdued new car market and that used car volume will improve. Across the business we continue to focus on maintaining our control on costs but without impacting our growth aspirations.

“Year to date profitability has continued to run ahead of the prior year and we therefore remain cautiously optimistic that the full year will be in line with expectations. We expect our balance sheet to be in line with our plan at the year end.”

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