A LUXURY car dealer will close showrooms and increase its focus on the used vehicle market after weaker demand dented earnings.

Pendragon is axing dealerships and offloading a US division in a £100m-plus deal following a profits warning.

The company runs the high-end Stratstone operation, known for selling marques including Jaguar and Mercedes Benz, and Evans Halshaw, which concentrates on more mainstream market manufacturers such as Citroen, Dacia and Ford.

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However, bosses say they will “reduce” its number of premium brand franchises over the next three years in a bid to turn around its fortunes following a decline in demand.

They have yet to reveal where its Stratstone changes will be made.

Instead, officials say the firm focus on the used car market, and aims to double revenue across its 118 Evans Halshaw dealerships by 2021.

Trevor Finn, chief executive, said: “Following a review, we have focused on re-shaping the business to accelerate transformation and ensure capital allocation is optimised.

"The actions are a further step towards achieving our strategic objectives, and I believe this will provide more reliable and sustainable returns."

Pendragon’s Stratstone garages include bases on Preston Farm, near Stockton, Newcastle and Houghton-le-Spring, Wearside, while Evans Halshaw has dealerships in Darlington, Middlesbrough and Gilesgate, near Durham City.