Profits in the car retail industry have declined further, with the average operating margin in the industry further decreased to just 1 per cent. The news came following a study by accountants Ernst Young.

According to the company, volumes and profits on new cars will decline in the new year, and even used cars in the UK are experiencing declines in profit margins. This is perhaps down to increasing cheapness of new vehicles, and the role of the internet in allowing buyers to research prices and never pay over the odds.

The servicing industry is also facing a tough time, with intervals between services growing and increasingly reliable vehicles on the road. Car finance packages and purchase packages that include free multi-year servicing only exacerbate this problem.

Finance and insurance are also sliding, with manufacturer-tied finance houses showing poor performance of late. Independent arrangement of finance is more common, using loans, mortgage increases, Internet providers or credit cards.