Car dealership Vertu Motors has blamed job cuts and the closure of showrooms on Sundays to Budget cost increases, anticipating a hit of around £10m. The group has already downsized its workforce in anticipation of a rising wage bill due to the Chancellor's decision to increase national insurance contributions and the minimum wage. While the number of jobs being cut is minimal, the company plans to reduce roles by not replacing workers when they leave. With a natural staff turnover rate of 15% to 20% among its 7,500 employees each year, Vertu, which operates 198 sites across the UK, will also close most of its showrooms on Sundays for the first time to mitigate the cost impact.
Additionally, it plans to consolidate its three brands under the Vertu banner. The company warned that it expects an additional £10m in wage costs in its next financial year ending February 2026 due to the Budget measures, and anticipates wage inflation in other areas such as car valeting and cleaning costs. This makes Vertu the latest company to announce job losses following the Budget tax increase. Several large companies, including Sainsbury’s, have made job cuts in the early weeks of 2025, with some of the reductions at the supermarket believed to be related to the increase in NICs.
Vertu Motors has issued a profit warning, stating that earnings will be "significantly" below expectations for the year ending February 28, due to lacklustre consumer demand and major disruptions in the new car market caused by the Government's ambitious zero emissions vehicle (ZEV) sales targets. Analysts had predicted annual underlying profits of £34.6m, a decrease from £37.8m the previous year, but Vertu's shares took a 6% hit following the announcement.
CEO Robert Forrester commented on the situation: "The Government’s ZEV Mandate is causing severe disruption to the UK new car market, and the consumer environment is subdued. ". He added, "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 been vocal in recent months about market volatility linked to the UK’s environmental goals, noting last year that car manufacturers are being compelled to ramp up the supply of battery electric vehicles (BEVs) due to the Government’s mandate, yet have had to cut prices amid waning demand. The new regulations set a target for BEVs to makeup 22% of all new car sales by 2024, increasing to 80% by 2030 and reaching 100% by 2035.
