TROUBLED used car dealership The Car Group is in talks with finance houses after revealing it is expecting second half trade to result in losses of more than £1 million.

The company, owner of National Car Supermarkets, made the announcement to end City speculation, following a profits warning which had seen its share price driven down to under 29p from a 221.5p high.

An official statement from the firm said: 'In response to the downturn in the market for used cars, the board has carried out a full review of its business and operations. This review has identified a need to reduce the break-even point of the business and to restructure the external financing of the business.'

The statement added: 'The board has received a number of approaches as a result of which it has entered into discussions with a major financial institution regarding the refinancing of the Group's current stock funding arrangements.'