More lay-offs expected

Bentley adds to car sector woes with 1,000 job cuts

Luxury marques are taking a hit

Bentley is the latest luxury carmaker to feel the brunt of the coronavirus lockdown and is expected to announce 1,000 job cuts on Friday.

Reports say the firm, which makes its cars in Crewe, will offer voluntary redundancy packages.

The lay-offs will represent about a quarter of the workforce, equal to the number currently on furlough while another quarter were working from home.

The carmaker has recently restarted production, but with only around half the usual number of staff.

The 101-year-old company increased its worldwide sales by 5% to 11,000 cars in 2019 but has struggled to be profitable in recent years.

Its problems are shared across the industry which has seen a slump in sales and big job cuts at Aston Martin dealer chain Lookers.

Aston Martin Lagonda cuts jobs

Aston Martin

Aston Martin Lagonda is cutting 500 jobs and doubling annual cost savings to £20m as part of a “fundamental reset” of the business, which includes a planned reduction in front-engined sports car production to rebalance supply to demand.

The company’s first SUV, DBX, remains on track for deliveries in the summer and has a strong order book.

It said the measures announced today will right-size the organisational structure and bring the cost base into line with reduced sports car production levels, consistent with restoring profitability.

The cut in the payroll reflects “lower than originally planned production volumes and improved productivity across the business”.

Aston Martin said it is taking decisive action in other areas to reduce cost and remove non-critical expenditure from the business at every level including in areas such as contractor numbers, site footprint, marketing and travel.

Car dealership firm Lookers is planning to close 12 sites and lay off 1,500 employees.

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Lookers operates dealerships in Ayr, Baillieston, Braehead and Hillington (Glasgow), Sighthill (Edinburgh), Hamilton and Stirling.

The company said it “regrettably considers this action as being necessary in the current environment to sustain and protect the Lookers business over the long term”.

This restructuring could deliver annual payroll savings of approximately £50m. One-off cash restructuring cost will be circa £9m.

The group had approximately 66% of its total current colleague base (c.8,100) remaining on furlough at the end of May. In June it is expected that this will reduce to approximately 55%.

The group reopened most of its dealership sales facilities on 1 June. With the benefit of enhanced online functionality which the business has been implementing, in the last two weeks, it has taken orders for 2,865 new and used vehicles which on a like-for-like basis represents approximately 51% of sales for the same period last year.

Car sales slump

Car showroom Perth

Sales of new cars fell by 89% last month as the coronavirus lockdown swept through the trade.

Only 20,000 cars were registered in May compared with 184,000 during the same month last year, the Society of Motor Manufacturers and Traders (SMMT) said.

It was the automotive industry’s worst May performance since 1952.

Just over half a million new cars have been sold in the first five months of 2020, compared with more than one million at the same point last year.

Car showrooms across the UK were closed for the whole of May, but limited deliveries of new vehicles ordered online could take place.

They have been able to reopen in England since Monday but remain closed in Scotland, Wales and Northern Ireland.

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