Car dealer shuts showrooms

TROUBLED Pendragon has outlined plans to close upmarket showrooms in Britain and offload its US division following a major review of the business.

The car dealer, which in October warned that profits for the year would be 20pc lower than previously expected, said it will reduce the number of its premium Stratstone sites over the next three years.

It currently has 70 Stratstone dealerships selling luxury car brands including Aston Martin, Ferrari, Jaguar, Porsche, BMW, Mercedes- Benz and Range Rover. Pendragon also said it expects to sell its US arm for more than £100m.

‘Given the strong performance of this division, we have concluded it is economically right to sell the business at this time to realise its value,’ a spokesman for the company said.

Pendragon will now focus on selling used cars in Britain through its 118 Evans Halshaw showrooms, which specialise in popular cars such as Fords, Vauxhalls and Nissans.

‘I believe this strategy will provide more reliable and sustainable returns,’ said chief executive Trevor Finn.

At the time of the profit warning in October, Finn warned that waning demand for new cars had driven down prices of used cars in a double-whammy for the company.

Recent figures from the Society of Motor Manufacturers and Traders showed sales of new cars in the UK had fallen for seven months in a row.

Pendragon shares yesterday closed up 3pc or 0.75p at 26p. The stock was worth 49p less than two years ago.