Vertu Motors cuts jobs and Sunday opening after budget and electric car target hits
The country's third largest car retailer says it is cutting jobs and closing its dealerships on a Sunday as part of efforts to cut costs amid tough trading and looming budget tax hikes.
Vertu Motors, which has almost 200 sites operating predominantly under the Bristol Street Motors, Vertu and Macklin Motors brands, made the announcement while revealing an unscheduled profit warning.
The company said its bottom line had taken a big hit amid steep discounting industry wide in a bid to meet a government target for sales of new electric vehicles - the so-called ZEV mandate.
Money latest:
Vertu, which employs 8000 staff, also pointed to a £10m rise in costs from budget tax rises due to take effect in April.
The ZEV mandate is the main gripe for the new car industry.
It demands a rising proportion of total sales come from zero-emission vehicles each year. It was 22% in 2024 and rises to 28% this year.
There are currently stiff penalties for missing that target.
It was missed last year amid the tough economy and industry pressure has forced a review.
The government has been looking at what help it can give to aid the transition since Vauxhall's owner moved to cut costs by announcing plans to close its Luton plant in April.
Vertu warned on Thursday that because price cuts to attract sceptical electric buyers were likely to continue this year, it expected further pressure on margins and for sales volumes to remain depressed given the continuing squeeze on household budgets.
Read more:Electric car demand hits record high but misses targetVauxhall parent very clear on why Luton plant is closing
The exact numbers of jobs affected by the company's spending cuts was unclear.
It is understood that while a small number of roles have already been axed, Vertu would not seek to fill jobs vacated through natural churn in the months ahead.
Vertu said it expected £4m in one-off costs to aid its long-term savings.
Those costs also included a move to bring all its brands under the Vertu name.
The company said in its statement that adjusted profit before tax for the year ending 28 February 2025 would be "significantly below current market expectations".
That consensus figure stood at £34.5m in December.
Shares fell by more than 7%.
Robert Forrester, Vertu's chief executive, told investors: "The Group's high margin aftersales business is performing strongly.
"However, the Government's ZEV Mandate is causing severe disruption to the UK new car market, and the consumer environment is subdued."
"The Government and the industry need to get together to address the root cause of the issues to allow the automotive sector in the UK to return to its traditional role of stimulating economic growth, which is a catalyst for employment."
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