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Change techniques or risk bankruptcy, warns Experian’s managing director

Bankruptcies will keep rising unless dealers use more sophisticated techniques to increase sales and profitability, says Rob Whalley, managing director of Experian’s automotive division.

There was a 22% rise in motor trade businesses failures between quarters one and two (54 to 66), and a year-on-year increase of 10% in the second quarter.

“Next month will see a large number of new car sales and trade-ins, but volumes are not the issue,” says Whalley. “The parc is growing much more quickly than the population and we will reach a point where there are more cars on the road than people eligible to buy them.

“We have been piloting data connection with a number of dealer groups, showing how they need to combine database cleansing, improved stock purchase and checks on vehicles.”

Whalley says a vast amount of information is available to dealers, such as profiles of existing or potential customers, and it becomes more valuable to them when it is linked.

“Dealers’ customers are still receiving letters suggesting a service on cars they have not owned for five years,” says Whalley. “Some retailers believe a mailshot to all customers is the way to boost profits when times are tough, but they are wasting a huge amount of money when the database is out of date.”

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