UPDATE 1-Car dealer Inchcape raises 2009 expectations

* Q3 revenues down 13.4 pct year-on-year, up 2.2 pct qtr/qtr

* Sales helped by government incentive scheme in Britain

* Improving trends in Hong Kong, Australia

(Adds detail, background)

LONDON, Oct 20 (Reuters) - Car dealer Inchcape (INCH.L) raised 2009 profit expectations on Tuesday, helped by a government scheme to encourage new vehicle purchases in Britain, but remained cautious about trading prospects well into 2010.

The British-based firm, which sells and distributes cars for manufacturers including BMW, Mercedes-Benz, Honda and Toyota in 26 countries, said third-quarter revenue fell 13.4 percent year-on-year but was up 2.2 percent quarter-on-quarter.

Sales were boosted by government incentives for consumers to buy new cars in Britain and by slightly better trading in Australia and Hong Kong, Inchcape said.

"Our group financial performance for the full year is expected to be significantly ahead of previous expectations," it said in a statement.

"However, we expect conditions to remain challenging in most of our markets until well into the second half of 2010 as consumer confidence continues to be weak across the world and unemployment is still rising in many of our key markets." (Reporting by Mark Potter; Editing by Dan Lalor)