Pendragon shrugs off rate worries

RISING interest rates will not take the wind out of the new cars market, the boss of Britain's biggest motor dealer said today.

With the cost of borrowing likely to top 5% by the end of the year, there are fears the booming market in new and nearly new cars could be coming to an end.

Trevor Finn, chief executive of Pendragon said, however: 'This is not like the housing market. If rates go up a quarter-point or half-a-point, car manufacturers will adjust the financing to keep consumers buying. They will be quite prepared to adjust the total cost ... to maintain sales.'

Latest figures show 1.4m new cars were sold in the first six months, putting the full-year figure on track for 2.6m, the same as in 2003.

Underlying growth of 10% on top of the acquisition of rival CD Bramall earlier this year saw Pendragon's first-half profits soar 70% to £40m. The interim dividend is lifted 10% to 4.2p.