EXPERIAN today announced the biggest rise in automotive insolvencies since 2001.
This alarming news comes on the back of a 30.9 per cent rise in companies going bust during the second quarter of 2008.
72 business failed between April and June – leaving the first-half total standing at 134, more than a 10 per cent rise on 2007.
Kirk Fletcher, managing director of Experian’s automotive division, said: ‘Everyone knew 2008 was going to be a tough year. However, when the year began positively – with quarter one seeing a six per cent drop in insolvencies, and both new and used car sales remaining fairly stable – there was hope the industry may manage to ride out the credit crunch for a few more months.’
‘These latest figures reveal a worrying nose dive.’
‘Conditions are tough and, with fears of a recession on its way, most companies are now monitoring the profiles of the businesses they are dealing with, and dealers may find that they are under more scrutiny than before.’
‘Whilst generating sales is important, maintaining a good business credit score and a low risk profile will be the factors that help dealers retain their business relationships and lines of credit.’
Experian analysed 34 industries, and found those going bust from the car industry posted the 10th-hihgest increase. Overall, the total number of businesses going bust rose by almost a fifth.