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Dealers see sales being hit this year
publication date: Mar 6, 2010
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author/source: Robin Roberts
The rate of business insolvencies for the automotive industry in January 2010 was 44.15 per cent lower than January 2009, and 48 per cent the rate experienced in December 2009, according to the latest Insolvency & Late Payment indices from Experian, the global information services company. Only 0.08 per cent of automotive businesses became insolvent in January 2010, compared to 0.14 per cent in January 2009 and 0.15 per cent in December 2009. Not since December 2008 has the rate been this low. Payment performance amongst automotive businesses, itself an indicator of business confidence, also improved throughout January. Automotive businesses have managed to shave a day off the time it takes to settle bills, down to 15.36 days beyond agreed terms from 16.72 in January2009. The automotive industry continues to be amongst the quickest to settle bills, slower only than the agriculture/forestry/fishing, oil and servicing/repair sectors. The financial strength2 of the automotive industry also increased year-on-year, going up to 79.91 from 78.78 in January 2009. Mark Nuttall, General Manager of Experian’s automotive business, said: “The Automotive industry has seen a good start to the year. It is too early to say whether we are out of the woods yet. The financial strength of the sector is still recovering from a volatile 2009, however, the decrease in insolvencies and improvement in payment performance in January are both good signs for the industry. “Irrespective of the economic climate, it is vital that dealers use business information tools to manage their exposure to risk by monitoring the health of their suppliers, customers and partners.” |
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