MOTOR dealer Reg Vardy drove profits up to £46m last year and is forecasting further growth, despite fears the new car market may have peaked.

The group, based in Sunderland, said it was gaining market share after EU rules came into force last year that shifted the power balance between manufacturers and dealerships.

The changes sparked a round of consolidation in the sector and helped Reg Vardy to buy 18 dealerships during the year to April 30.

Sales of brands such as BMW and Ford are now made from 91 sites in the UK and the group is on track to hit its target of 100 dealerships by the end of next April.

Pre-tax profits for the period reached £46.3m, from £39.7m a year ago, while the new dealerships helped turnover push ahead 22 per cent to £1.61bn.

But concerns that the market for new vehicles may be peaking followed a slowdown in registrations between April and last month, especially in the private small car sector.

This led to group profits from new vehicle sales during the period falling below planned levels, although the motor industry expects a fourth consecutive record market this year.

Reg Vardy operates dealerships in an area from Aberdeen to Reading and sells most of the major brands, including specialist marques Aston Martin, Jaguar and Land Rover.

Low inflation and interest rates were propping up consumer demand and the used car market reached two million units in the first quarter of the year for the first time.

Since the year end, the group has bought a Vauxhall dealership in Hartlepool and is negotiating for another site.