The British division of Wagon, the car parts company, became the latest high-profile victim of the crisis gripping the global motor industry when it was put into administration yesterday.

The move puts 500 jobs at risk and there will be immediate cuts at the group's headquarters in Birmingham. However, Zolfe Cooper, the administrators, said that they hoped to sell Wagon's factories in Coventry and Walsall as going concerns.

Wagon makes parts for many carmakers worldwide, including General Motors, Ford, Honda, Nissan and Land Rover, and it intends to keep its operations outside the UK running as normal. The company, which is controlled by Wilbur Ross, the American billionaire, employs 6,300 people globally.

Wagon has been unable to secure extra funding for its global operation and has hit a liquidity crisis, its administrator said.

Alistair Beveridge, a partner with Zolfe Cooper, which specialises in interim management, blamed the dire state of the global car market for Wagon's demise. He said: “The global automotive sector is battling unprecedented market conditions, which have led to many of the major car manufacturers significantly reducing their production schedules. This has had a major adverse impact on customer orders for Wagon and resulted in the liquidity crisis, which has led to the appointment of administrators.”

All carmakers are imposing lengthy shutdowns to reduce production as sales plummet. Last week it was revealed that UK car sales had slumped by 37 per cent in November, with some brands, such as Land Rover, suffering drops of more than 60 per cent.

Vauxhall, the British division of General Motors, the struggling American carmaker, is the latest to lengthen its Christmas shutdown, doubling it to a month. Mini, the BMW-owned brand, is on a month-long closure and next year Honda will stop production for two months.

Wagon caused a sensation in Britain more than three years ago when it pulled the plug on MG Rover, refusing to supply parts because it was not being paid. Its move led others to follow suit and the withdrawal of the supply chain hastened the collapse of the independent carmaker.

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