Inchcape, the UK’s second largest car dealer, has issued a profits warning and is now expected to make job cuts.
The group, which employs 6,000 people in Britain, is seeking to make cost reductions of £50m but it said it was unable to say how many jobs would go as part of that initiative.
It has been forced to issue a profits warning as year-on-year sales in the three months to 30 September fell by 10.8 per cent.
In a statement to the stock exchange the company warned that trading in Europe was becoming “more difficult” but it is the decline in the UK that has had the biggest impact.
It said that despite outperforming the market it had “clearly been affected” by the downturn in the UK, which accounts for 40 per cent of its total turnover, and warned it did not expect conditions to improve for the foreseeable future.
“We expect current trading conditions to remain difficult for the rest of 2008 and throughout 2009,” Inchcape said.
“As a consequence we expect our underlying results for 2008 to be below consensus and for 2009 to be significantly below our previous expectations.
“We are undertaking a substantial overhead reduction programme to right-size the business in the light of current market conditions.”
Inchcape’s share price plunged 38 per cent in this morning’s trading to 78.5p following the announcement.