Car dealership Holiways has gone into administration and most of the company's 81 staff are set to be made redundant.
The new and used car dealer - which had sites in Newton Aycliffe and Bishop Auckland - had suffered a drop in trade as a result of reduced consumer spending.
And this is despite the company selling its Durham and Hartlepool dealerships in recent weeks.
KPMG have been appointed administrators .
"It is unsurprising that during a recession, a relatively rural car retailer has struggled. Despite a restructure, which saw Holiways sell two dealerships in recent weeks, the siginificant losses incurred by the business through the summer means it simply couldn't continue to trade."
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