News release

Serj Heera
Press Relations Executive, Automotive & Insurance
+44 (0) 115 976 8945 Tel Email

Automotive business failures fall in 2007

Company insolvency forecast to rise in 2008

Nottingham, UK, 4 January 2008 - After a tough two years which saw rising numbers of business failure among motor traders, 2007 saw a complete turnaround for the industry as business failures dropped by 22.3 per cent, according to the latest insolvency figures from Experian®, the global information services company. 

The figures for the year showed that 248 motor traders failed compared to 319 in 2006.  This is the biggest annual drop in failures that the industry has seen since Experian started collating this information in 2002.  This was after dealers saw the highest increase in the number of motor traders failing during 2005, up 17.4 per cent to 283, followed by the second highest increase (12.7 per cent) during 2006 when the figure rose to 319. 

As the final quarter of 2007 came to a close, the number of business failures among motor traders fell by 1.4 per cent, compared to the same period in 2006 – a much smaller fall in failures than seen in quarter one (down 37.5 per cent), two (down 30.3 per cent) and three (down 18.8 per cent) in 2007.

Kirk Fletcher, Managing Director of Experian’s Automotive division, said: “The annual figures may indicate an optimistic end to the year, but this is far from the case and the final quarter gives a more truer picture. The fact that the declining rate of business failure dropped off markedly as the year progressed – to virtually nothing by the final quarter of the year – suggests that 2008 could see the failure rate rise again.  And, although motor traders recorded the ninth highest improvement for the year of the 34 sectors analysed, they were still amongst the highest (14th place) in terms of the number of insolvencies in any sector. 

“Businesses are feeling the effects of interest rate rises and the squeeze on borrowing conditions and these figures are masking the real picture.  Trading conditions are still tough and many smaller dealers are struggling.  The downturn in insolvencies in 2007 could simply be highlighting the increasing trend of larger dealers merging with the smaller dealers that are struggling to remain in business.”

Business failures in all sectors during quarter four fell by 20 per cent.  For 2007 as a whole, the number of failures throughout all sectors fell by 8.9 per cent to 18,263.



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About Experian’s Automotive division
Experian’s Automotive division offers intelligent solutions, which enable its customers to optimise the potential of the vehicle, the consumer and the market.  Working with organisations operating throughout the vehicle life cycle from manufacturers through to retailers, finance houses, insurers and aftermarket service providers, solutions are delivered through two business streams.  Automotive Data and Decisioning enables customers to interrogate in real-time the history, identity and risk associated with any given vehicle and Automotive Marketing Solutions helps the automotive market target, acquire and manage customer relationships more effectively and efficiently both on and offline.