Stansfield Motors Limited has laid off 48 employees between August 2011 and February 2012, reducing their workforce from 189 to 141.
Stansfield managing director David Grimes said in an interview on Friday that deteriorating economic conditions in the country, particularly the forex shortage, has forced the company to reduce its workforce.
The forex challenge has been hindering the company from paying its foreign principals in time and, as such, they are refusing to accept orders from the motor dealer until all arrears are paid.
Grimes said Stansfield has lost K500 million (about $3m) in revenues on vehicle sales and about K200 million (about $1.2m) on spare parts and service due to the forex problem.
He said their principals such as Daimler, Great Wall Motors (GWM), Mitsubishi, Michelin and Yamaha are now demanding payment upfront or letters of credit to process their orders.
“One of our major problems is that our overseas principals are not prepared to supply vehicles or spare parts unless they are sure that payment would be made and we are unable to do that on our own. And when we seek support from banks, they are also unable to help because of the current forex situation. So to import spare parts and vehicles, in particular, is difficult,” said Grimes.
Stansfield Motors depends on computerised systems to operate, diagnose faults and fix them in customersâ€™ cars. It also needs the software for identification of spare parts, all of which Grimes said have licences that are also payable externally.
“If these licences are not updated, they switch off because they have software system calendars built into them. So it hinders our ability to run the companyâ€™s overall accounting and control systems,” he said.