LONDON -- British car dealer Inchcape expects margin pressure in the U.K. to be offset by its best-ever sales of Subarus in Australia, Chief Executive Peter Johnson said on Wednesday.
Trading is in line with market expectations and 31 million pounds ($56 million) of the group's 65 million pounds share buy-back program has been completed, added Inchcape, which distributes and sells cars for Toyota, BMW, Ferrari and others.
Australia, which with New Zealand contributes 16 percent of operating profits, looks set for record sales, Johnson told Reuters.
"Subaru has just below 4 percent of market share, which is our best ever," he said.
"Hong Kong is recovering, but a little slower than we thought," he added. "The U.K., from a margin perspective, is tough, but in a tough market, we're pleased with the results."
The Singapore division is also trading well, he said.
Hong Kong accounts for 17 percent of group operating profit, Britain for 14 percent and Singapore and Brunei for 32 percent.
Investors are closely watching retailers such as Inchcape for clues to the state of the U.K. economy as debt-laden consumers curb spending as a result of interest-rate rises, higher utility bills and stagnating house prices.
Johnson said that while sales of prestige cars to businesses remained strong in the U.K., sales to private buyers of smaller cars such as hatchbacks had softened.
"Retail demand, especially the smaller car -- the one that was reliant on finance -- has come off," he said. "That hasn't tended to affect us as we're more at the specialist end of the market.
Range Rover Sport and BMW 3 series, which earlier this year were in short supply, are selling strongly.
"Those are very successful models and we're selling every vehicle we can get our hands on," he said.