March 25, 2020 / 10:56 PM / 4 days ago

Group 1 signals major drop in March auto demand, furloughs nearly 6,000 staff

March 25 (Reuters) - Auto dealership Group 1 Automotive Inc said on Wednesday its overall U.S. vehicle sales in March were down 50% to 70% from normal levels and that its chief executive officer would take a 50% pay cut, as the coronavirus outbreak roils the auto industry.

The company said it would furlough 2,800 employees, or about 90% of its workforce, in the UK and 3,000 employees in the United States due to the massive decrease in business activities.

Group 1 said its UK order intake nearly halved in recent weeks and it would close all of its dealerships there as per a government order.

"This (the outbreak) is requiring us to take many severe and regrettable actions to re-size our business to minimal activity levels in the near term," Chief Executive Officer Earl J. Hesterberg said in a statement here

The company also said it will reduce U.S. marketing expenses by more than 75%.

According to research firm J.D. Power, U.S. auto sales in states with coronavirus lockdown orders could drop 80% or more. (Reporting by Nishara Karuvalli Pathikkal in Bengaluru; Editing by Ramakrishnan M.)

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