SCOTTISH car dealerships affected by the collapse of MG Rover have made their first redundancies as the fall-out from the firm's descent into administration begins.

According to the Scottish Motor Trade Association, each of the 20 Rover dealers around Scotland is facing estimated losses of between pounds-150,000 and pounds-200,000 as a result of the carmaker's collapse.

Many are also out of pocket because they are being forced to sell leftover cars at a discount.

Around 1000 employees could be affected north of the border.

Administrators PricewaterhouseCoopers yesterday confirmed Rover is to be sold on a "piecemeal" basis with creditors set to get a settlement that is "nil or negligible" as very few assets remain.

The decision means that the future for MG Rover's hundreds of creditors looks bleak.

Reports have suggested that creditors may get no more than five pence for every pound they are owed, or even as little as 1p.

While many of the dominant dealer groups such as Arnold Clark and Reg Vardy have the firepower to cope with the additional costs from the Rover debacle, smaller independent outlets which were dependent on selling Rover cars are staring at overwhelming losses.

Douglas Robertson, SMTA chief executive, said he had yet to hear of any Scottish Rover dealers going bust, but warned:

"That is not to say that it will not happen in the near future.

"We know of redundancies in a couple of dealerships in Scotland as a result of Rover, " he added.

Scottish dealerships continue to sell Rover cars, albeit at a lower price, and report that demand for the vehicles remains buoyant.

However, the SMTA warned that consumers may find the value of their Rovers is substantially below expectations when it comes to trading them in.