Pendragon will focus on used cars and aftersales to help it deliver profit this year.

According to the AM100 topping group, aftersales remain the core area of profitability for the business.

Aftersales turnover declined by just over 2% in Q3, but gross aftersales profit margin in the quarter improved by 110 basis points over the prior year, with gross profit flat for the quarter.

Used car volumes increased by 18% in Q3 while new car volumes fell by 10.3% with Stratstone and by 10.8% in its Evans Halshaw business.

Pendragon is using a vehicle health check programme to stimulate aftersales work and has developed “a number of other initiatives”.

The group saw “significant volume growth” in used car sales in Q3 with like-for-like volumes up 18%.

During July and August Pendragon had observed a decline in margin against the prior year. However, used car margins have recovered for Pendragon strongly in September and it expects to see the normal seasonal patterns in used car margin in the fourth quarter.

Overall like for like used retail gross profit in the nine months to date was 1.2% ahead of the prior period.
In a statement to the stock market, Pendragon said: “Despite the increasingly challenging macro-economic environment and continued economic uncertainty, underlying trading performance remains in line with our expectations for the full year.

“Used performance continues to be a differentiator for the group and we believe this will continue in the final quarter with further recovery in used margin.

“The new retail car market is challenging, particularly for some of our franchises in the volume sector.

“However, we expect stronger performance from some of our prestige franchises in the fourth quarter.”