PEOPLES Motor Group has reported a 22% rise in sales, leaving it on target to secure £200 million in revenues for its current financial year, but profits are likely to be flat due to what chairman Brian Gilda regards as white-hot competition in the sector.

The Labour Party donor said that he believes the economy is picking up, although "if Putin decides to invade Pilton" he would need to rethink his position.

The Ford specialist, who does two-thirds of his business from outlets south of the Border, said he has not made any preparations for the prospect of Scottish independence.

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Mr Gilda said: "What is happening is that people are definitely feeling more relaxed about putting their money into a vehicle."

He said that they had been helped by the quality of vehicles on offer, as well as access to finance, which has led many customers to effectively rent their vehicles, and an improving economy.

"We have continued to grow our shares in the markets we operate in," Mr Gilda added.

He said models such as the Fiesta and Focus had done particularly well.

Peoples' Scottish businesses, operating from dealerships in Edinburgh, Falkirk and Livingston, are doing slightly better than those in England.

Mr Gilda, whose company operates from a total of seven dealerships in central Scotland and north-west England, said that discounts of £5000 upwards regularly offered to customers a few years ago are now rarely seen. Instead, incentives are linked to the finance deals being offered to customers.

But he denied that the industry could be hit if record low base rates start to rise. He said finance terms will remain at current levels for the foreseeable future.

"Nobody believes they will go back to what they once were," he said.

He said that sales of new cars are doing well and those of older used vehicles are "going like billyo".

But he said selling used cars less than a year old is a "little bit tricky".

Mr Gilda said that the commercial vehicle market is picking up as people such as builders start to invest in their companies on the back of rising construction activity.

"We are seeing a significant increase in commercial vehicles sales," Mr Gilda said.

He said that commercial customers are now demanding greater comfort from their vehicles.

He noted that the UK has benefited from an improved supply of vehicles as manufacturers kept their plants going but had to cast around for sales due to the economic woes of parts of southern Europe.

Its 2013 financial year, its 30th anniversary year, Peoples' pre-tax profit doubled to £4m. But Mr Gilda conceded that while income will rise this year, profits will be flat.

"Anybody can sell cars. It is making money that is difficult," he said.

He added: "The margins are being very difficult because the competition is white-hot.

"We used to think of the customer being king. We now think of the customer being God."

But he said he was pleased with the outcome, having feared tougher conditions this year.

He said that he now views the economic recovery as sustainable, although he remains sceptical about the Coalition Government's policies.

"The economy does seem to be growing. Whether you like George Osborne or otherwise is another story.

"If Putin decides to invade Pilton we will take another view on it," he added.

Peoples, which employs around 180 people in Scotland, will take no action regarding the possibility of independence ahead of September's vote, he said, due to the uncertainty about its implications.

"As soon as the result is announced we will come up with the Peoples' policy.

"At the moment we cannot really war-game it."

Two-thirds of Peoples' turnover and 60% of its 400 employees are based south of the Border.

But he made it clear that Peoples is very unlikely to move its base south.

"It is a Scottish company, forged in Scotland," Mr Gilda said.

Peoples said that as a result of the figures for last year it has extended sponsorship to Children 1st, Boghall and Bathgate Caledonia Pipe Band and the Scottish Motor Racing Club.

Mr Gilda said the support is worth a combined £70,000 to £100,000 a year.