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Motorline Group plans 10% pay cuts due to COVID-19 impact

Motorline's £14.5m Hyundai, Lexus and Peugeot showroom development in Gatwick

Motorline Group is set to open consultation with its workforce over a 10% cut to employee pay in response to challenges faced as a result of the COVID-19 crisis.

AM understands that the Canterbury-based AM100 retail group informed staff about the move as car showrooms across England re-opened to customers this week.

“Consultation will start shortly, but the firm is expected to push through the pay cuts without much delay,” said a source.

AM has attempted to make contact with Motorline's directors, but has yet to gain a response.

Claims that Motorline is set to commence efforts to cut its wage bill come in the same week that Lookers announced that it would be making 1,500 job cuts as part of a restructure of its business.

Vertu Motors also detailed the impact of COVID-19 on its trading in an annual financial results statement this week.

Inchcape, meanwhile, appeared in a list of 53 businesses which have borrowed millions of pounds from the Bank of England under the Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS) in an effort to weather the current crisis.

In its most recent annual financial results, published on June 25 last year, Motorline revealed that its profit before tax had slumped by 85.2% to £597,475 despite a 15% increase in revenues to £234.8m in 2018.

The group said in its annual results statement for the period to December 31, 2018, that while the acquisition of Lexus Bristol from Sytner in December 2017 and the opening of its new Lexus dealership at Gatwick had boosted its sales, higher administration costs elsewhere in the business and the relocation of its Lexus Cardiff showroom had created an added financial burden.

Days later Motorline announced that it had ended its involvement in the Hyundai Bluewater Store after 16 months, stating that it did “not believe the mid- to long-term viability” of the shopping centre new car sales concept.

Motorline chairman, Glen Obee, said at the time: “The current economic climate and pressure to maintain an acceptable level of income from our wider Group activities has resulted in our decision to make a limited number of amendments to our Group representation model.

“This is where we do not believe the mid to long term viability of the activity is sufficient to meet our requirements going forward and, regrettably, the Hyundai Bluewater Store falls within this category for us and we have reached agreement with Hyundai UK to hand the Store back to HMUK on the 31st July 2019.”

Motorline currently operates 55 car dealerships and four TPS Centres in locations across Kent, West Sussex, Surrey, Berkshire, Bristol, South Wales and the West Midlands.

It represents 11 OEM brands, including Volkswagen, Lexus, Hyundai, Peugeot, Skoda, Nissan, Maserati, Toyota and Audi.

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