Motor dealers Lookers is shutting its Newcastle office, putting around 60 jobs at risk.
The firm, which last year issued a profit warning and saw its three most senior executives lead amid a turbulent period in the automotive industry, is switching some duties to its headquarters in Greater Manchester.
The company has a big presence in the North East having bought Newcastle’s Benfield Motors in an £87.5m deal in 2015, as well as acquiring Washington and Stockton firm Jennings last year.
But it has suffered from a slump in demand for new cars and last year announced the closure of around 15 dealerships after reporting a 3.2% drop in new car sales.
Lookers is not alone in being hit by widespread problems affecting the automotive industry, but its problems were increased by an announcement that it was being investigated by the Financial Conduct Authority.
The company’s share price, which had been over £1 this time last year, slumped to less than half that last summer though it has recovered slightly to stand at 63p.
It is believed that the decision to shut Lookers’ Newcastle office will see some duties move to its headquarters in Altrincham.
A statement from the company said: “The car retail sector has faced extremely challenging market conditions over the last year and Lookers has not been immune from those headwinds, which have had a significant impact on the trading performance of the group.
“Consequently, the group has undertaken a number of difficult but necessary measures to operate a simpler organisational structure, with more discipline and efficiency.
“Regretfully, we have informed colleagues that we are proposing to close our offices in Newcastle.
"We are consulting with those colleagues affected and we will make every effort to support staff in finding alternative roles across the business where possible.
“We will be supporting all those affected throughout the process.”
Figures released at the start of January showed that car sales in the UK plunged to a six-year low in 2019, with economic and political uncertainty, plus a big drop in demand for diesel cars, hitting the entire automotive industry.
The Society of Motor Manufacturers and Traders said the drop in demand was “a significant concern for industry and the wider economy”.
