The impact that Jaguar's prolonged fall in sales volumes has had on luxury car dealers has been highlighted by financial results from the biggest of all, Pendragon.
Sales of luxury cars sold via the group's 161 upmarket Stratstone outlets rose by 4.3 per last year in a total UK market that increased by only 2.5 per cent.
Jaguar, however, was down by nearly 20 per cent. This was partly because sales of the mid-range S-Type ebbed away in anticipation of the arrival in the showrooms of its well received replacement, the XF, for which the maker has advance orders of about 9,000.
Pendragon stressed, however, that the fall in Jaguar sales had had "a disproportional adverse effect" because Stratstone accounts for about 26 per cent of all Jaguar sales in the UK.
It was a similar story in California, where Nottingham-based Pendragon operates a niche division selling Jaguars and Land Rovers.
The introduction of the new Freelander helped to boost Land Rover sales by 3.7 per cent but Jaguar was 24.2 per cent adrift.
Falling car prices sparked by rising interest rates in 2007 contributed to a 51 per cent drop in pretax profits to £46.5 million last year, Pendragon said. Revenues remained flat at £5.1 billion.
The total dividend is raised by 16 per cent to 4p per share.
The company, which also operates the Evans Halshaw volume outlets, is the country's biggest dealership with 343 UK sites.
Lower new car prices which resulted from the fact that manufacturers had "forced new product into the market" severely affected margins on used car sales.
Pendragon incurred major restructuring costs last year as it axed unprofitable small sites and added 19 former Dixons dealerships.
The company first highlighted the growing competitiveness of the new car market in April of last year.
Chief executive Trevor Finn said: "We acted early, closing poorly performing sites and, as a result, are better placed to face the challenges in what remains an uncertain market in 2008."
It responded to the tougher conditions in 2007 by targeting lower price used cars and reducing its exposure to nearly new cars where values were adversely affected by deflationary pressure from lower new car prices.
Pendragon said the UK car market remained very fragmented with the largest ten dealer groups owning only 20 per cent of the total market in the UK.
The company ceased operations at 21 of the 26 sites it identified in April as being marginal to its business.
The remaining outlets will be closed or sold this year.
Stratstone, which also holds franchises from Aston Martin, BMW, Mini and Mercedes Benz, reported an operating profit of s30.3 million in 2007 compared with s49.5 million the previous year, a fall of 39 per cent. Revenue was 1.5 per cent down at just under s1.9 billion.
In total, Stratstone's new car volumes were adrift 5.9 per cent on 2006 while gross margins fell by four per cent on a like-for-like basis. The margins figure in used car sales fell by almost 14 per cent as a result of the more competitive market.
Evans Halshaw, which operates from 161 sites, saw its principal brands, Vauxhall and Ford, increase registrations by 9.8 per cent and 1.3 per cent respectively.
Analysts at Panmure Gordon said that an underlying pretax profit of s34.8 million, which discounts exceptional gains from the sale of surplus property, came in ahead of its forecasts of about s34 million.
However, Panmure added in a note: "The real acid test will come in early April, when we are likely to get a feel for how the company has traded through the key March market - typically 17 per cent of annual registrations."
Mr Finn was untroubled by a 2.1 per cent fall in UK new car registrations in January, noting that only three months last year, one of the best on record, had seen increases.
"Interest rates are going in the right direction," he said. "We get a double bang from falling rates - our funding costs are reduced and buying momentum increases."
