SIR Arnold Clark has warned of a challenging period ahead for the motor industry even as the company he founded unveiled a record turnover of more than £2.9 billion.

However the industry veteran, now 86, stated his belief that Arnold Clark Automobiles would continue to flourish.

Writing in accounts filed at Companies House he said: "Despite some signs of improvement in the wider economy we anticipate a challenging year ahead for the motor industry.

"We have consistently demonstrated that we can succeed against this backdrop and early trading results have been encouraging."

The accounts show turnover rose almost 18 per cent from £2.48bn to £2.92bn in 2013 while pre-tax profits surged 33 per cent from £60.5m to £85.2m.

Eddie Hawthorne, managing director of Arnold Clark Automobiles (ACA), was also confident but admitted the growth rate of the business was likely to slow.

Writing in the accounts he said: "The financial strength of the company and the early trading results mean we can look forward with confidence.

"The board predict that, whilst turnover will continue to grow in the coming year, it will not grow at the same rates experienced in 2013 and expect profitability to remain at similar levels."

Sir Arnold, who opened his first showroom in Glasgow 60 years ago, described the 16.8 per cent increase in used vehicle sales to 142,964 as "incredible" with the figures helped by acquisitions.

There was a 10.9 per cent hike in new vehicle sales to 88,697 which was put down to a stronger UK car market and the impact of branches which had been previously acquired.

The Arnold Clark Finance operation, which provides vehicle rental services, increased its turnover to £170m and saw pre-tax profit increase 5.5 per cent to £12m.

Sir Arnold said the group continued to invest heavily in its online operations and its main website had attracted record levels of traffic with more than 17 million visitors.

Alongside that there was still major investment across its customer facing retail estate.

A new purpose-built five acre Citroen dealership in Armadale is said to be the largest for that brand in the UK and have posted strong trading figures since its launch in December.

Volkswagen sites in Wishaw and Rutherglen were also overhauled in the year while a new Chevrolet facility in Perth was built.

There was further new build activity in the East Kilbride Toyota premises and the Ford operation in Aberdeen.

It was a quieter year for acquisitions as the group looked to integrate the purchases it made in 2012 such as the John R Weir Group.

There was one Vauxhall dealership in Ayr bought in October last year while ACA's investment portfolio was bolstered with the addition of tenanted dealerships in Leicester, Glasgow, Stirling, Warrington, Stourbridge and Wolverhampton.

In the accounts Sir Arnold hails the completion of the company's multi-million pound training centre in Wolverhampton.

He said: "The site provides us with bespoke training in England as we continue to expand geographically and also affords us the opportunity to engage with local authorities and businesses in the region by offering third party training and conference facilities."

Along with that the family controlled business is also relocating its Scottish training facility from the Sighthill area of Edinburgh to a larger site nearby at Newbridge.

The accounts also confirm the purchase of Towquest, which is the main software provider for Arnold Clark Finance. Staff costs across the group increased from £204m to £241.6m with average employee numbers up from 8,315 to 8,930.

Directors' remuneration came in at £6.5m, up from £5.9m. The highest paid saw their emoluments increase by 25 per cent from £2.2m to £2.76m.

There was a £1.45m dividend paid in the year, down from £2.1m in the previous 12 months.