Trading Statement

Pendragon PLC
25 June 2007



                          PRE CLOSE TRADING STATEMENT

We explained in our AGM Statement on 27 April 2007 that an oversupply of new
cars, forced into the market by manufacturer incentives and pre registrations,
had put pressure on the used car market in the first quarter of this year.
Whilst there was some improvement in the used car market in March this has not
continued and, consequently, our used car performance is below our expectations.

We see the market for used cars for the remainder of the year as subdued due to
two factors. Firstly, we expect that the market for big ticket items such as
motor cars will continue to be adversely affected by the uncertainty around
interest rate movements. Secondly, we expect manufacturers to continue to force
new cars into the market either through incentives or pre registration activity.
The negative effect of manufacturers seeking to protect volumes in the new car
market is that consumers switch away from used cars as they see greater value in
new cars. We expect this consumer switching to reduce our used car margins and
unit sales this year compared to last year.

In the first quarter of this year new car profits remained broadly in line with
last year. Since then we have seen a gradual reduction in margin as the car
market has weakened and price competition has become more intense.

We believe the slowdown in consumer spending will continue into next year and
will adversely affect our operating profits this year by £20 million and by £10
million in 2008. Of the £20 million reduction this year, approximately £5
million is due to a reduction of four per cent in the number of new and used
vehicle unit sales and the remainder is due to a reduction in vehicle operating
margin of approximately £50 per unit.

In previous downturns in the sector we have been very successful in identifying
opportunities for further consolidation. We expect to be able to continue to do
so as smaller dealers seek to exit this difficult trading environment. We will
announce our financial results for the period ending 30 June 2007 on 7 August
2007.


Enquiries:

Pendragon PLC  Trevor Finn, Chief Executive      Tel:  [phone]
               David Forsyth, Finance Director

Finsbury       Gordon Simpson                    Tel:  [phone]



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