Midlands car dealership Pendragon has axed 500 jobs, saying it had to trim costs because of the declining car market.
The Nottingham group said it was “difficult to forecast” prospects for the car market over the year.
It added May had seen a “significant decline” in national car registrations, with a 9.5 per cent fall in new private cars and 15 per cent fall in new small business vehicles.
A spokesman for Pendragon said: “It is unclear as to whether the level of activity decline in May, which appears to have continued since June, will persist for the year.
“Our view is it will and there will be a continuing exposure to any further slowdown in the economy.”
Pendragon, which owns Evans Halshaw and Stratstone, cut the jobs from its 15,700-strong national workforce.
It operates almost 400 franchises, and owns nine US dealerships. The firm’s focus on the UK market has made it more vulnerable to a financial downturn than rivals like Inchcape, which have made progress in Russia, China and the Baltics.
Although it tried to reassure shareholders its sales were “robust”, and the group profitable, shares fell more than a fifth after the announcement.The company said it expects the decline in activity for new and used cars in May and June to persist for the rest of the year.
But it said it had taken action to reduce costs and added the job cuts would limit the impact of the difficult trading conditions.
But market analyst Mike Allen, of Panmure, said things were likely to get worse before they got better for Pendragon.
He added: “While we downgraded our forecasts earlier this month in anticipation of poor trading in May and June, we do not have much confidence in these at present and they could prove now to be the best case.”