CAR dealership Lookers today said it was "very confident" about the full year after strong used car sales and the Government’s scrappage scheme helped boost performance.

Manchester-based Lookers said trading during the third quarter to September 30 had remained strong and was "significantly ahead" of budget.

Robust used car sales volumes continued to offset a weaker new car market during the first nine months of the financial year, according to the group.

The firm said sales across the UK new car sector had declined 15% year-on-year to the end of the period, but added its same-store sales outperformed the wider market by 11%, helped by corporate business and the scrappage scheme.

This "cash-for-bangers" programme launched in May, offering motorists £2,000 off a new car when they scrap an old vehicle more than 10 years old.

Chief executive Peter Jones said while economic conditions remained uncertain and the new car market would continue to be difficult, used car volumes were expected to stay at current levels.

"We are pleased with the strong trading performance for the third quarter following the excellent result for the first half of the year which was delivered in a difficult market," he said.

The firm said its parts divisions had achieved "record results" in the period.

Its franchise aftersales business grew 3% and gained market share, as consumers repair and maintain rather than replace their cars.

"These factors, together with our strengthened balance sheet, give us confidence that we will continue to trade successfully in the current economic climate and be able to take advantage of selective opportunities as they arise," Mr Jones said.

Lookers posted a 34% drop in pre-tax profits to £8.6 million for the six months to June 30 after exceptional items, but said profits rose 14% on an underlying basis.

The firm, which has 121 dealerships across the UK, raised £80.7 million through a placing and open offer to cut debts earlier this year.

It was forced to slash costs after the car market crumbled in the face of the credit crunch and recession - shutting 21 dealerships and axing around 6% of its workforce to save £12 million.