McVerry Crawford Motors Wanganui is to close, leaving seven staff without jobs.
It is the latest blow to the city's employment market.
Only yesterday the New Zealand Transport Agency office closed, resulting in the loss to the region of 15 jobs.
McVerry Crawford Motors Wanganui is franchised to sell and provide full parts
and servicing to new Mitsubishi and Hyundai cars, and new Isuzu utilities.
The closure could mean 2300 car owners will be forced to source parts and servicing for their vehicles outside Wanganui.
Branch manager Richard McVerry declined to go into detail about the closure, saying the firm's decision to drop the three franchises was due to a variety of complex reasons.
The date of closure depended on whether the manufacturers find another business to take on their existing stock of new vehicles, he said.
"We have agreed with the manufacturers to try and make a transition.
"It will happen at a suitable time and place," Mr McVerry said.
Wanganui Chamber of Commerce president Jenny Duncan expressed regret for the staff of the branch.
"This closure is symptomatic of the recession, and indicative of the difficulties new car dealerships face during times of economic scarcity.
"People make an economic choice during hard times which, though sound and necessary, has an unfortunate knock-on effect economically.
"I am hopeful and positive, however, that the skilled team of staff will be absorbed back into the Wanganui workforce swiftly. Service and repair skills are in high demand.
"It is also crucial the existing stock of new vehicles is taken on by another Wanganui-based dealership," Mrs Duncan said.
Paul Quirk, sales manager at Wanganui Toyota told the Chronicle the closure was an indication of how slow new vehicle turnover had been. He expressed fears over the negative effect the closure would have on the market.
"It is a shame for the city as the loss of those franchises reduces the range of vehicles for locals to see and choose from. We are in direct competition but this closure is bad for the Wanganui car market as a whole, because service and parts for those manufacturers may have to be sourced outside Wanganui.
"I only hope the existing vehicle stock can be locally reappointed so that capital and revenue can be retained in Wanganui," he said.
McVerry Crawford Motors started trading in Marton 32 years ago, where it retains a branch. Others in Palmerston North and Feilding will also remain open.
McVerry Crawford Motors Wanganui is to close, leaving seven staff without jobs.
It is the latest blow to the city's employment market.
Only yesterday the New Zealand Transport Agency office closed, resulting in the loss to the region of 15 jobs.
McVerry Crawford Motors Wanganui is franchised to sell and provide full parts
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