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More losses and job cuts for UK car sector as coronavirus downturn deepens

Inchcape and Pendragon both announced widespread job cuts and restructuring programmes

Pendragon Group -

Britain’s car industry was confirmed as deep in the mire after manufacturing slumped and two leading dealers announced big losses and job cuts.

UK carmakers produced the lowest number of cars since 1954 in the half-year to June according to The Society of Motor Manufacturers and Traders (SMMT).

Output over the period fell 42% to 381,000 cars said the industry trade body, as coronavirus lockdowns meant widespread plant shutdowns.

According to the SMMT, almost 11,500 jobs have been shed in the sector over the past six months with most manufacturers also furloughing staff and mothballing plants.

More job losses were announced today as car dealer Pendragon PLC (LON:PDG) said it was closing 15 outlets with the loss of 400 jobs while a further 1,400 roles were being cut at its store and support function.

The staff losses and closures are expected to save the car dealer £37mln a year in total.

Bill Berman, chief executive, said the cuts reflected a shift to a resilient, leaner and more profitable business across the entire group.

Inchcape PLC (LON:INCH), meanwhile, posted a loss of £188mln as it announced a restructuring programme that will cost it £198mln.

Duncan Tait, chief executive, said the programme would save the company £90mln a year and involve job cuts in sales and support functions.

The company would also rationalise its footprint, said Tait, with the cash cost of the restructuring to be £70mln.

The global car dealer also said interim revenue tumbled 36% to £3bn and profit before tax before the one-offs had crashed 94% to £9mln.

Most of its markets have now reopened but the firm said it is too early to forecast how the rest of the year will pan out.

Inchcape shares tumbled 10% to 433.6p, Pendragon eased 5% to 7.7p.

Lookers, another dealer that last month said it would cut 1,500 from its car dealerships and shut an additional 12 sites, is suspended at 21p.

Quick facts: Pendragon Group

Price: 8.245 GBX

LSE:PDG
Market: LSE
Market Cap: £115.18 m
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