UK car dealer Pendragon has issued its second profit warning in five months, saying the company expects to miss full year profit targets by Â£12 million.
The company has been hit by falling used car prices and tough trading in the US market.
According to the BBC, Pendragon's Californian business was damaged both by the weak US economy and by the fires which spread throughout southern California earlier this year.
Although Pendragon said that used car margins were improving in the last few months, the company still cut its profit forecasts for 2008 by Â£18 million, reports the BBC.
By 16:15 London time Pendragon's shares had dropped 36% to 34.50 pence.
In June the company issued another profit warning due to a slowdown in UK consumer spending, caused by interest rate rises, and an oversupply of new cars on the market, according to the BBC. That profit warning reduced the profit target for this year by Â£20 million.
Pendragon will release one more trading update in December 2007 before announcing its full year results in February 2008. In 2006 Pendragon reached a Â£139.3 million operating profit and a Â£96.4 million pre-tax profit.