The UK auto aftermarket could be hit by more than 7,000 job losses in the UK next year - and the economic uncertainty of the last few months is not entirely to blame.

According to the 2002 Plimsoll Analysis: auto parts – traders report for the last three years the cost of employing people has been increasing at a greater rate than the industry has been able to afford The cost of salaries has been increased by 19%, yet sales have only risen 7%.

The analysis provides 'strong' evidence that at least 81% of the industry will need to shed jobs in the next 12 months. There are 204 companies in financial distress.

David Pattison, Plimsoll senior analyst said: “A staggering 48% of the companies included in the analysis could not absorb next year's salary increases as they simply cannot afford to pay them. There is little doubt managers will use the current economic and market conditions to make decisions they should have made 18 months ago.”

Plimsoll analysed the top 1,000 companies in the UK aftermarket sector. Each speculated on how many jobs would have to be lost to remain competitive. The total came to 7,904.