Closure of Mercedes-benz of Loughborough, Why and What Happened?

Mercedes-Benz of Loughborough Closes: Reasons, Impact, and What’s Next for Employees

Closure Announcement and Background

Mercedes-Benz of Loughborough officially closed on 30 April 2025, joining a wave of dealership shutdowns across the UK. This closure is part of the Mercedes-Benz Retail Group’s exit from direct retail operations in the country, following years of financial losses and a strategic shift in how the brand sells cars. 

Sustained Financial Losses: The Mercedes-Benz Retail Group reported ongoing pre-tax losses-£35 million in 2019, £20.9 million in 2020, and £3.66 million in 2023-making continued operations unsustainable. Mercedes-Benz is moving to an agency sales model, where dealerships act as agents rather than independent retailers. This transition has reduced profitability for the retail arm while it is supposed to help the brand improve profitability.

The UK’s recent economic woes, rising costs, and changing tax policies have squeezed margins for car retailers as well as some retail groups have also underperformed over the years - these are just some of the multidimensional problems facing the automotive industry, not to talk of the challenges caused by the transitions to cleaner and zero combustion travel modes.

Impact on the Local Economy: The closure of the Loughborough dealership resulted in job losses and reduced economic activity in the area. While specific numbers of employed staff at the Loughborough location are not publicly disclosed, the broader downsizing of Mercedes-Benz Retail Group saw a reduction in workforce from 1,325 to 781 employees, indicating significant job cuts across various locations. The loss of such a dealership can affect local suppliers to the business, service providers who rely on car parts from the dealerships, and the overall economic vibrancy of the Belton Road East industrial estate.

Job Prospects and Local Opportunities: Employees of the closed Mercedes-Benz Loughborough dealership are primarily facing redundancy, reflecting the wider downsizing of the Mercedes-Benz Retail Group in the UK. While generous severance packages are reported at the corporate level in other regions, there is no specific confirmation of such offers for Loughborough staff. Local re-employment opportunities exist but are limited due to the broader contraction in the automotive retail sector. Some former employees may seek new roles within the broader Mercedes-Benz network or in the wider automotive sector. Loughborough is home to Sandicliffe,, Kia Loughborough, Vertu Toyota, Lister VW and Pentagon PSA and a sizeable other private dealership - hopefully, technicians and other staff would be able to carry on working in the area in similar roles.

It might be an opportunity for technicians to establish their own private Mecedes-Benz repair centres as the brand can be difficult to work on without the correct Mercedes-Benz foundational training.  

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