During the year we highlighted the very competitive new car market and the deflationary effect on transaction prices of new cars.  Whilst this has been positive on new car volumes, it has had a negative effect on used car margins as the deflationary effect on new car prices also feeds into used car prices.  We have been successful in maintaining activity levels in used car sales although this has not compensated for the loss of margin.

Used car margins have shown a positive trend over recent months but this recovery is too late to recoup lost profits from earlier this year.  Additionally, we have experienced a drop in our California business due to US economic uncertainties and very recently serious bush fires in the southern California area.  Cons ...

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