Shares in Pendragon tumbled 20% in morning trading after the car manufacturer issued a profit warning.

In a trading update for the third quarter, the group expects underlying profit for the year to reach £50 million. This is a 17% fall in profits last year, which were £60.4 million.

Pendragon said the fall in profits was due to the introduction of Worldwide Harmonised Light Vehicle Test Procedure, which disrupted sales.

“This has caused significant new vehicle supply disruption which gives us cause for concern over the coming months for new vehicle sales and profitability. This will clearly have an effect on the group,” said the company.

According to the Society of Motor Manufacturers and Traders (SMMT), car sales in the UK fell by a fifth in September.

A total of 338,834 new cars were sold in September. This is down 20.5% compared with the same month last year.

Analysts at Jefferies said the trend would continue into next year.

“We understand that new car sales are following similar trends in October as the disruption remains, and subsequently new car registrations for the UK could again be down double digits,” they said.

“While we expect into 2019 that the issues are worked through, there is an element of new car sales that will be lost as consumers and businesses make other arrangements.”

In other motor news, MPs are calling for a ban on new petrol and diesel car sales by eight years to 2032.

A government spokesperson said: “Our Road to Zero strategy outlined our ambition for the UK to be the best place in the world to build and own an electric vehicle.”

Shares in Pendragon (LON: PDG) are currently trading down 9.49% at 23,85 (0847GMT).

 

 

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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.