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Debts rise as bodyshops close

Debts in the bodyshop industry now total £722m, with insurers owing £495m at any one time, according to the 2007 Refnish Industry Survey.

Coinciding with this debt, which equates to 13.6% of the total industry turnover, is an increase in insurers debtor days. These averaged 53 days in 2006 compared to 40 in 2000.

Figures show that if insurers’ debtor days were reduced back to 2000 levels then the debt owed to the industry would reduce by £188m. Currently only trade businesses have managed to improve their debtor days while fleets remain steady at an average of 44.

Training continues to be a serious issue, with up to 80% of bodyshops ignoring any kind of staff training. The PAS 125 is set to address this but, according to the survey, more than 60% of bodyshops are unaware of the kitemark standards.

The survey also showed electronic resets are of concern to bodyshop owners, with 70% reporting a rising demand for the service over the last year. Only 37% of bodyshops have the equipment to deal with electronic resets and most won’t pay to take the car to a dealer.

The news comes at a time when the number of bodyshops continues to decline, showing a 7.7% fall since last year. Franchised dealer bodyshops have been hardest hit with 1,200 closing in the last decade, compared with around 400 independents.

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