The brakes were slammed on Scottish motoring group John Clark’s profits after a series of major investments in Dundee.
The firm opened a new Jaguar Land Rover dealership in Dundee last year and acquired the Volvo franchise in the city from Barnetts.
It also embarked on refurbishing its Skoda and Seat dealerships in the city, which were completed earlier this year.
Newly filed company accounts show the Aberdeen-headquartered firm’s turnover increased by 11% to £824 million for the year ending December 31 2018.
Pre-tax profits fell by 53%, from £7m in 2017 to £3.2m last year.
Group managing director Christopher Clark said “marketplace challenges caused by economic and political uncertainty” had led to
reduced consumer confidence.
He said: “Whilst pleased to again report growth in turnover, our operating margins came under sustained pressure, despite our expanded aftersales operations again delivering improved results.
“Our 2018 trading performance saw some exceptional challenges which were not within the group’s control.
“These included vehicle stock supply shortages our Volkswagen Group franchise suffered in the latter months of 2018.
“The results of our BMW franchise also deteriorated, with similar profits decline and vehicle stock pressures said to have been seen across their dealer network.”
Sales of new vehicles outperformed the market, growing at 3% 14,067 units, at a time when new car registrations fell by 8% across Scotland.
During the year the company sold its loss-making Nissan franchises in Dundee and Perth to Eastern Western.
Earlier this year the aftersales workshop in Dundee was expanded by relocating the accident repair centre to stand-alone premises.
Mr Clark added: “Management team focus remains high on customer satisfaction, operating cost levels and working capital controls.
“Plans are being progressed for the 2020 relocation of our BMW and Volvo businesses in Dundee, as well as Volvo in Edinburgh.”
Across the group, staffing levels increased from 1,262 in 2107, to 1,396 last year, with 136 in a managerial capacity, 126 in administration, 362 in sales, with 772 fulfilling other roles, including an increased number of apprentices.
Mr Clark said the group’s working capital position was “healthy”.