Car dealerships are being forced to close as salesmen struggle to cope with a declining market in the face of competition from the internet.

Skoda dealership Saltdean Garage in South Coast Road, Peacehaven, owned by businessman Nick Dray, ceased trading on Friday.

Associated garages in Peacehaven, Shoreham and Chichester also closed.

Mini garage John Cooper Works, at East Preston, near Worthing, owned by the son of the developer of the original Mini Cooper, shuts on Monday.

The closures came as new car sales in Europe slumped, although the price of second-hand cars held steady.

Chris Banks, sales manager at Saltdean Garage, said: "The fact is the customer isn't out there looking to buy a new car.

"The internet is having a profound affect. People are buying their cars online and we've suffered as a result. People don't even want to service their cars at the moment."

As well as Saltdean Garage, the Chevrolet dealership in Peacehaven, Ballamys in High Street, Shoreham, and Citygates in Terminus Road, Chichester, have all ceased trading.

A proposed merger between Mr Dray's Saltdean Motor Group and Saunders Abbott garages has also been scrapped.

Swan Renault dealerships in Chichester and Goring are also thought to be under threat. A manager at Saunders Abbott, based in St Leonards, who did not wish to be named, said: "The merger would have been quite good for us but unfortunately they couldn't survive due to the lack of profits.

"But that's being noticed across the board. They were just too cheap for too long. Renaults are struggling, as are Fiats it's very, very tough.

"Over the last five years you would not believe the difference in profit margins. They have plummeted."

New car sales across Europe dropped last month as registrations fell 4.1 per cent year-on-year.

Troubled US giants Ford and General Motors both reported losses, while the value of second-hand vehicles remained the same as the first three months of last year.

Mike Cooper, of John Cooper Works, said he was closing his showroom to concentrate on the design and manufacture of tuning kits for Mini cars. The kits are sold at Mini dealerships around the world.

Mr Cooper said: "This was a very difficult decision to make but it was a decision for the future, taking the brand forward.

"I wanted to have a place to explain the history and heritage of Mini Cooper and my father John's work but, as far as the retail business is concerned, it's time to move on.

"With major players in the area moving into receivership these are very, very difficult times."

Jeremy Taylor, chief executive of Sussex and Surrey business group Cadia, said the desire for cheaper goods was driving many retailers to the brink of collapse.

Car dealers, he added, had to diversify to survive in the current climate. He said: "The industry is having to adapt dramatically to a new business model. We live in hypocritical times when we want to pay the cheapest possible prices yet we want to keep our local businesses and high employment.

"The internet is a real threat. I would hope these businesses are making the most of their service and spares capabilities because that's where the money is now."

Mr Dray was unavailable for comment.

Tuesday, July 25, 2006