Automotive industry records fewer business failures but Experian warns dealers not to become complacent


News release

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

Automotive industry records fewer business failures but Experian warns dealers not to become complacent

Nottingham, UK, 8 April 2008 - As the UK recorded a rise in business failures during January, February and March 2008 (up 8.5 per cent), the automotive industry appears to have bucked the trend, according Experian®, the global information services company.

The latest insolvency report from Experian shows that the number of automotive companies that went out of business during quarter one this year fell by 6.1 per cent, compared to the same period in 2007.

Kirk Fletcher, Managing Director of Experian’s Automotive division, said: “With the current climate of cautious spending and aggressive competition, the general feeling has been that that the insolvency figures for the automotive industry were not going to look good.  However, this is the second year the number of business failures recorded for the automotive industry fell during quarter one, suggesting a positive start to the year.

“The feedback from our dealer clients, however, has been that the last few months have been particularly tough and they have had to work harder to pull in the customers who are spending cautiously.  Smaller dealers are feeling the trading conditions the hardest, while the bigger groups are keeping their heads above water and avoiding big buyouts, focusing instead on smaller, single site buyouts, which could account in part for the fall in dealers failing.

“It is also important to remember that during 2006 the industry saw the biggest increase in the number of failures seen since Experian first started collating this information in 1997 (up 71.7 per cent), so it is not surprising that the following years have seen an improvement.”

The latest insolvency report shows 62 automotive business failures during quarter one, compared to 66 during quarter one 2007.  The automotive industry was amongst 19 of the 34 sectors that saw a decline in business failures during January, February and March. 

Kirk concluded: “While these figures are positive, we must not lose sight of the very real hurdles still to overcome.  New car sales fell during quarter one and used car sales, which had been falling throughout 2007, are likely to follow suit.  There is little sign that the current squeeze on spending and lack of consumer confidence will ease up anytime soon and the recovery over the last two years could quite easily be cancelled out by the rise in fuel duty and as well as the imminent increase in car tax. 

“Dealers recognise that they need to be more prepared and on the ball in order to do well or at least keep their heads above water.  It is at times like this that tools helping dealers to exercise caution, manage their risk exposure and operate more efficiently become more valuable than ever before.”


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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.