Vauxhall is terminating the contracts of all its 326 dealerships in Britain as the company battles to deal with plunging sales and a changing market.

The marque is ending all dealer contracts in the UK - a move also happening with sister brand Opel across Europe - as the entire sales network is reorganised.

Some 1600 dealers across the pan-European network will be given two years’ notice from April 30 that the manufacturer is ending its relationship with them, and proposing a new contract with about two thirds of them.

About 12,000 staff are employed in franchisees' UK dealerships but Stephen Norman, Vauxhall's UK boss, insisted that staff would not lose their jobs as a "direct result" of Vauxhall's decision to refranchise the network.

"Based on 42 years experience in the industry, and having been through four of these network refranchisings, I do not expect jobs to be threatened," he said. "I'm don't want to 'de-dramatise it, but refranchising is not something that doesn't happen at regular intervals in the motor industry.