Owner of dealers such as Evans Halshaw to shed head office and showroom staff as Covid-19 deepens industry crisis
Pendragon started to review its operations well before the coronavirus struck but the pandemic has seriously affected the industry.
Photograph: Jacob King/PA
The UK car dealership Pendragon plans to cut 1,800 jobs, in the latest sign of the turmoil hitting the automotive industry because of the coronavirus crisis.
Pendragon, which employed about 8,000 people before coronavirus struck the UK, said 15 of its stores would be closed with 400 job losses. A further 1,400 redundancies will be made across its dealers and its head office after a review of its operations, which started before the pandemic.
The closures and redundancies will cut costs by about £35m a year, leaving the dealership with about 150 stores. Pendragon’s largest retail brand is Evans Halshaw, which sells mass market brands such as Peugeot, Renault, Vauxhall and Ford, while its premium Stratstone chain sells marques such as BMW, Ferrari and Jaguar Land Rover.
The pandemic has battered the car industry. The French carmaker Renault on Thursday reported a record loss of €7.3bn (£6.6bn) in the first half of the year, while Germany’s Volkswagen swung to a loss of €1.4bn.
Traditional car dealerships were already under pressure as consumers became more confident buying cars online rather than visiting a showroom. The pandemic has further exposed them, with Pendragon’s main rival, Lookers, in June cutting 1,500 jobs. Lookers is also facing a separate fraud investigation.
The job cuts are the latest in a wave of automotive redundancies. The moves by Pendragon mean that more than 13,000 job losses have so far been announced by carmakers or retailers in the UK this year.
UK showrooms were allowed to open on 1 June after the lockdown forced their closure from 23 March, giving car companies some much needed cashflow. However, industry bosses expect further employment cuts as the government’s job retention scheme, which pays furloughed workers’ wages, finishes at the end of October. Economists almost uniformly expect unemployment to rise in the coming months, which would probably further depress car sales.
Bill Berman, Pendragon’s chief executive, said the cuts “reflect our intention to create a resilient, leaner and more profitable business across the entire group.
“These have been difficult decisions for the board to make and our priority now is to manage the transition to our new operating model.
“The Covid-19 pandemic is a uniquely challenging situation and we want to protect as many jobs as we can sustainably and the proposed redundancies are, of course, extremely regrettable.”