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Automotive business insolvencies rise

Automotive companies going bust rose by 31 per cent during the second quarter of 2008, compared to the same period last year.

Seventy two businesses failed in April, May and June, showing the biggest increase in quarter two since 2001, according to an Experian survey.

Since the beginning of the year, 134 automotive businesses have become insolvent, more than 10% rise on last year.

Kirk Fletcher, Experian automotive managing director, said: “Most companies are now monitoring the profiles of the businesses they are dealing with and dealers may find that they are under more scrutiny than before.

“While generating sales is important, maintaining a good business credit score and a low risk profile will be the factors that help dealers retain their business relationships and lines of credit,” added Fletcher.

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