LONG-running local dealership Collie Toyota is expected to close down as early as November.
The closure is expected to cost the town several jobs and will leave only one car dealership in Collie, Station Motors Holden.
It is feared the closure may also affect other businesses reliant on the health of Collie's automotive industry.
Station Motors Holden owner Paul Pilawskas said the lack of competition when Toyota closes will not only affect his dealership but other businesses involved in the auto market in Collie.
He said the car industry was a very competitive and demanding operation and there had been healthy rivalry between Station Motors Holden and Collie Toyota for 40 years.
"Customers had a choice of product, visiting car yards, shopping around, comparing pricing and demonstration drives," Mr Pilawskas said.
"Competition always has and will have a positive result in sales, service and parts."
Mr Pilawaski said Collie had seven dealerships in the 1970s offering apprenticeships, administration, mech anic and sales personnel jobs.
Now the town will be down to one Holden dealership.
"Not only do we employ locally but the dealerships have offered sponsorship to local sporting clubs and community projects," Mr Pilawskas said.
Collie Chamber of Commerce chief executive Richard Jackson said the closure of Toyota was very disappointing but inevitable as the Baby Boomer generation retired and moved on.
Mr Jackson said he hoped a new tenant was found soon who could bring more employment to Collie.
"Obviously the job losses will hurt those affected but we have to hope that a different business takes over the lease and generates other jobs," Mr Jackson said.
"Maybe this is an opportunity for other Collie businesses to provide that service so that people don't have to drive to Bunbury."
Collie Toyota was contacted for comment on the closure.