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VAUXHALL will stop the contracts of all of the 326 dealerships putting 3,700 jobs at risk in the UK as the company deals with falling sales and a changing motor industry.

The company, which employs more than 12,000 people in the UK, is ending the dealer contracts as it atempts to reorganise its network.

Vauxhall dealerships across the UK, including Sheffield, Doncaster and London could be at risk of closure as the struggling car firm axes branches.

There are also fears for the future of the Vauxhall factory at Ellesmere Port after the car firm announced its scaling back its dealerships.

Around 1600 dealers across the European network will be given two years’ notice from April 30 that the manufacturer is ending its business deal with them.

Related: Vauxhall to consult franchise owners over plans to reduce number of dealerships

Vauxhall’s managing director, Stephen Norman, said: “Conditions in the motor industry are changing, the competition is much more ferocious today especially in the UK than it was five years ago and inevitably there are different methods of consumption of automotive products and services including online and digital.

“Conditions in the motor industry are changing, the competition is much more ferocious today especially in the UK

Vauxhall’s managing director, Stephen Norman

“Given what we see as the evolution in motor consumption in the next five to ten years – we have to think about the profitability of our franchising network and it is in their interests that taken this decision difficult though that may be to perceive at this stage.“The profitability of the network is positive for quarter one this year and for the full year last year but the amounts being made are in our opinion insufficient as things stand today and we want to protect the profitability of the franchise as times goes by.”The chief said that Vauxhall would continue to be Britain’s second-largest dealer network after the restructuring.Although the sales of Vauxhall cars have been falling for a while, the decline was quicker last year and sales dropped 22 per cent.Vauxhall sales plunged by more than a fifth last year, which was worse then the market decline of 5.7 per cent.

Mr Norman said that the changes in the company are not related to Brexit and it would have happened “with or without Brexit”.

These cuts have come just three days after Jaguar Land Rover announced it is cutting 1,000 jobs after falling sales.

Vauxhall’s European sister company Opel is also shutting down dealerships as it tries to adapt to customers visiting car dealers less.

Shadow Business Secretary, Rebecca Long-Bailey, has said the changes to Vauxhall were “deeply concerning”.

She added: “The Government must urgently meet with Vauxhall and the trade unions to ensure that workers are properly supported and jobs safeguarded.”

Vauxhall’s communications director Denis Chick said the car maker will change the remuneration process for dealers and introduce new standards to better reflect the changing market, as consumers do more research online.

He said “We will probably lose a few retailers.”

Source: Express

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