A well-known Wolverhampton car showroom was closing down today – just two years after being rescued in a Co-op buyout.

The former Asgard dealership in Parkfield Road, now called Motorworld, employed 25 people, 23 of whom are now facing redundancy with the general manager admitting: “We’re all shattered.”

It had previously traded as Volvo specialist Asgard before going into administration in 2006 and being rescued in a Co-op buy-out.

Richard Shepherd, group general manager for the car sales arm of the Co-op, said today: “The principal reason for the closure is the serious downturn in the economy which has adversely affected the motor industry.

“Car sales have declined due to lack of customer confidence and the fact that credit is more difficult to obtain.

“For these reasons we have taken the difficult decision to close our Wolverhampton site.”

Mr Shepherd said arrangements had been made for customers to transfer to other dealerships in the area, adding: “We are very sad to have to take this action.”

General manager Bob Deacon, 54, who took over the running of the branch a year ago, said business at the site had turned the corner.

He said: “We’d halved the losses which was all we’d been asked to do and the branch was doing well compared to others.

“Everyone’s shattered by the whole thing .”

The Walsall-based Midcounties Co-op stepped in to take over the Volvo and Hyundai dealership in January 2006, buying it out of administration. The business then employed around 100 people.

It then became part of Motorworld, the society’s motor sales group which also has dealerships in Swindon and Newbury.