Caffyns issues gloomy sales outlook

In a statement to the stock exchange, the dealer group said a slowdown in the housing market and an adverse environment for consumer credit would hit the company.

“Retail demand, which is the key driver of our business, has been weakened and December was a particularly disappointing month. This downward trend has continued in January,” said the statement.

Since its half year results in November 2007, Caffyns said the market for new cars had continued to grow slightly but margins had come under increasing pressure from economic weakness and competitive price cutting.

It said it expected margins to remain under pressure for “some time to come” and trading performance would be “considerably weaker” in the second half of the year than in the first half.

Earlier this week Lookers announced its trading update in which it warned of a “competitive market” and said its outlook was “cautious”.