Demand rose in the first three months of 2017 ahead of a tax increase which came into force in April pushing down demand thereafter. The industry has also been hit by uncertainty over diesel policy and Brexit, a car industry body has said.

"Although profits... are down on last year, as expected, this was due to a very strong comparative period, driven by record new car sales ahead of the decline seen across the market from April 2017," said Chief Executive Andy Bruce.

Lookers expects its full-year performance to meet market expectations, which according to a Thomson Reuters poll of analysts will see the firm post a 15 percent increase in pre-tax profit.

(Reporting by Costas Pitas; editing by Kate Holton)