One of the UK’s most popular car dealership brands has announced it will close its showrooms on Sundays and cut jobs as it faces a £10million wage bill increase following recent Budget measures.
Vertu Motors blamed rising costs from the Chancellor’s national insurance and minimum wage hikes for the sweeping changes.
The company plans to reduce its workforce through natural staff turnover rather than immediate redundancies.
The number of job cuts is expected to be minimal, with the group typically seeing 15 per cent to 20 per cent of its 7,500 employees leave each year.
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Robert Forrester, Chief Executive of Vertu Motors, said the Budget had created difficulties
VERTU MOTORS/PA
The announcement comes as several major UK firms, including Sainsbury’s, have announced job cuts in the early weeks of 2025, with some reductions linked to increased National Insurance Contributions.
Vertu Motors, which operates 198 sites across the UK, will close most of its showrooms on Sundays and streamline operations by merging its three brands under the Vertu banner as part of cost-cutting measures.
The £10million increase in wage costs is expected to impact the company’s next financial year to the end of February 2026.
The car dealer warned it would face additional cost pressures beyond direct wage increases, including higher expenses for services such as car valeting and cleaning. The company’s shares fell six per cent following the announcement.
Vertu Motors warned that profits would be “significantly” lower than expected for the year ending February 28, citing subdued consumer demand and severe market disruption.
The profit warning comes amid challenges posed by the Government’s Zero Emission Vehicle (ZEV) mandate sales targets.
Analysts had previously forecast annual underlying profits of £34.6million, down from £37.8million the previous year. The company has highlighted ongoing market volatility due to UK environmental targets.
The ZEV mandate requires manufacturers to have 28 per cent of all new car sales come from zero emission vehicles by the end of 2025. This will rise to 80 per cent by the end of the decade.
Robert Forrester, chief executive of Vertu, expressed concerns about the “severe” market disruption caused by environmental regulations.
He said: “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.”
The company has repeatedly warned about market volatility resulting from UK environmental targets in recent months.
The impact of these challenges was evident in Vertu’s October financial report, which showed a significant decline in performance.
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Vertu Motors said it would be forced to close dealerships on Sundays to cut costs
VERTU MOTORS
The company’s adjusted pre-tax profit fell to £23.5million for the half-year, down from £31.5million in the previous year.
The pressure on the automotive sector continues to mount, as the Government’s zero-emission targets become increasingly stringent.