Inchcape Retail UK grew its revenues by 4.1% to £2.183bn in 2013 but trading profit dropped 2.9% to £54.7m.

Like for like sales at the 111 dealership group rose 8.7% to £2.143bn after it sold its Ford dealerships in February 2013.

Trading margin declined to 2.5% from 2.8% the prior year. Inchcape said the decrease was a result of the price pressure on new vehicles and the consequent impact on used vehicle prices.

"Our continued cost discipline resulted in overhead reduction vs. last year. This was offset by an unprecedented level of tactical activities in the market which resulted in an over-supply of vehicles and which impacted our gross margin on both new and used cars," the company said.

Inchcape's entire UK business, including the retail group and fleet and leasing company Inchcape Fleet Solutions, grew total sales by 4.2% to £2.224bn but trading profits dropped 2.9% to £63.3m.

Operating profit was flat at £62.2m against £62.3m in 2012

In its statement, Inchcape said it expects the overall UK automotive industry to continue its growth trajectory in 2014 albeit at a lower rate than 20313.

It predicted the expected recovery of the European markets should reduce the level of tactical activity in the UK market which should gradually improve new and used vehicles margin performance.

"We are well positioned to leverage the growth of the New car and Aftersales market as we stay focused on delivering superior customer service and launch the exciting pipeline of our brand partners' new models.

"We expect to deliver a solid performance in the UK in 2014 as we expect a gradual recovery of vehicle margin and we plan to leverage the good growth momentum of the 1-5 year car parc," said chief executive Andre Lacroix.

Business initiatives for Inchcape Retail UK this year include accelerating its aftersales growth with focus on CRM and online service booking, and driving upsell with daily performance management to leverage the car parc growth.

For Inchcape's full global financial results, click here.