May 2010 Automotive Insolvencies

Automotive insolvencies drop in May
Rate at lowest since December 2007

Nottingham , 2 July 2010 — The rate of business insolvencies[1] for the automotive industry almost halved from 0.12 per cent in May 2009 to 0.07 per cent in May 2010, according to the latest Insolvency and Late Payment indices from Experian®, the global information services company.

As well as seeing a year-on-year fall, the rate dropped from 0.08 per cent last month to 0.07 per cent, a low not seen since December 2007.

The financial strength 2 of the automotive industry also saw a slight improvement both year-on-year and month-on-month, going up to 79.71 from 79.31 in May 2009 and from 79.67 in April 2010.

However,  automotive businesses saw a slight increase in late payment with automotive businesses paying their bills16.67 days after agreed terms in May last year, rising to 16.86 days late in May this year.

Mark Wilkinson, Sales Director for Experian Automotive business, said: “The decline in insolvencies and improvement in financial strength in May is a good result for the industry in the current economic climate.

"Feedback from automotive businesses in the UK is that chasing debt is a key issue. For the financial strength of the industry to remain buoyant, keeping in touch with supplier terms, and managing risk around those, will remain key.”

Insolvency rate

May-10

May-09

April-109

Automotive

0.07%

0.12%

0.08%

All sectors

0.08%

0.10%

0.10%

Source: pH, an Experian company

Insolvencies   

May-10

May-09

% Change from 09

April-10

Automotive

          24

               43

-44.2

          29

All sectors

 

     1,491

          2,023

-26.3

     1,818

Source: pH, an Experian company

Financial Strength Score

May-10

May-09

% Change from 09

April-10

Automotive

     79.71

          79.31

0.5

     79.67

All sectors

     80.70

          79.98

0.9

     80.76

Source: pH, an Experian company

Days Beyond Term

May-10

May-09

% Change from 09

April-10

Automotive

     16.86

          16.67

1.1

     16.25

All sectors

     20.91

          23.63

-11.5

     21.07

Source: pH, an Experian company

ENDS

Contact:

Natalie Hale

0115 992 2645/07971 709 274

natalie.hale@uk.experian.com

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

For more information, visit www.experian.co.uk.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2010 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil. 

For more information, visit http://www.experianplc.com .

 

Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners.


[1] The insolvency rate is calculated by comparing the number of businesses that failed with the total automotive business population in Great Britain.

2 The financial strength score predicts the likelihood of a business failing in the next 12 months, with 100 being the least likely to default and 1 being the most likely.

 

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