MOTOR dealer Reg Vardy expects this year's turnover to be more than £2bn after a strong performance in used car sales.

Managing director Robert Forrester said the Sunderland company was performing in line with expectations and that he expected turnover to increase by more than 16 per cent.

However, the number of new cars being sold by the dealership continued to fall.

"New car sales have been down every month since April 2004, but it only accounts for a third of the business," said Mr Forrester.

"We are ahead of the UK market and moving forward in terms of used car sales.

"We have bought a lot of dealerships over the past two or three years - about 30, which accounts for almost a third of them - and we are now realising the fruits of that.

"We have to be mindful of the way the overall economic climate is going, but our showrooms are still busy and selling cars constantly."

He said he expected company turnover to be more than £2bn by the end of the financial year, up from £1.72bn last year.

However, analysts have predicted profits will fall for a second year to between £37m and £39m, down from £43.8m last year.

The company, which has 98 sites, said dealerships acquired recently were performing in line with expectations.