Car dealership Vertu Motors has revealed falling half-year profits as sales of new cars tumbled more than 10% amid price hikes caused by the Brexit-hit pound.
The group, which has 123 showrooms and outlets across the UK, posted a 7% drop in pre-tax profits to £16.1 million for the six months to August 31.
It said like-for-like sales of new cars dropped 10.1% as drivers held on to their existing motors for longer in the face of higher prices caused by the Brexit-hit pound, as well as falling used car values.
But used car sales rose 1.6% on a like-for-like basis and Vertu said prices in the used market had now stabilised, although those at the premium end remain under pressure.
Vertu added that new car sales had continued to fall in September, down 1.6% on a like-for-like basis.
It said: “Continued sterling weakness driving price rises and declining used car residual values have led to an increase in the cost to change for consumers seeking a new car.
“This has reduced demand, with change cycles lengthening.”
The company said it remained on track for the full year, though it added a note of caution amid Brexit uncertainty.
“Continuing political uncertainty has potential to undermine consumer demand notwithstanding continued UK economic growth and record employment levels,” the group said.
The sector has been knocked hard by a declining car market.
The latest figures from the Society of Motor Manufacturers and Traders showed demand for new cars has fallen 2.5% so far during 2019.
Rival car dealership Pendragon – which trades under the Evans Halshaw and Stratstone brands – recently revealed plans to axe around 300 jobs and shut more than 20 Car Store showrooms as it warned over steep annual losses.