A CAR dealership firm is to axe around 1,500 jobs and close a further 12 showrooms blaming the coronavirus outbreak and a 'tough' car market.

Lookers, which has dealerships in Middlesbrough, Sunderland and Newcastle, said it was launching redundancy consulations across all areas of the group.

It is not yet known which dealerships, or if any in the North-East, will close but is expected that the group will be left with 136 dealers across the country.

Lookers has been hit hard by a difficult car market, which has been compounded by plunging sales amid the lockdown, as well as internal issues after it uncovered a potential fraud within the business in March.

A deal to potentially merge with the Pendragon group - which owns Evans Halshaw and Stratstone - fell through last month after the two failed to 'secure' a deal.

The announcement came as latest figures from the Society of Motor Manufacturers and Traders showed only 20,000 new cars were registered in May - down 89 percent year-on-year - in the worst May performance since 1952.

Recently-appointed chief executive of Lookers, Mark Raban said: "We have taken the decision to restructure the size of the group's dealership estate to position the business for a sustainable future, which regrettably means redundancy consultation with a number of our colleagues.

"This has been a very difficult decision and we will be supporting our people as much as possible throughout the process."

The group was forced to shut all its showrooms as the UK was placed in lockdown in March, but opened 41 in April for repairs and maintenance for key workers, followed by aftersales sites in May and then most of its dealerships reopened on June 1 as restrictions were eased.

Lookers said following the phased reopening and bolstered online offering, it has taken retail orders for 2,865 new and used vehicles in the past two weeks, just over half of the sales seen a year earlier.

"We have used the time as the business has been closed to adapt and evolve to meet changes in consumer behaviour, not just for a post-Covid environment, but also to enhance our digital offering and the trend towards electrification," said Mr Raban.

The group still has about 55 percent of its workforce furloughed on government support schemes.

It was forced to postpone the release of its 2019 annual results in March after identifying possible accounting fraud in one of its divisions, and launched an investigation by accountancy group Grant Thornton.

Just days after the announcement, chief operating officer Cameron Wade quit the business.

Lookers said the probe was "nearing completion", adding that initial findings have thrown up the need to strengthen financial controls and overhaul "some behavioural and cultural aspects".