The total number of insolvencies within the automotive industry fell by 18% to 0.09% during August in comparison to the same month last year.
There were 31 insolvencies in the sector during August and there have been 357 in total this year.
Figures from Experian’s insolvency and distress index revealed the figures are at their lowest point for 20 months.
This is the first time since the beginning of 2008 the rate of insolvency for the automotive industry has matched the rate of insolvency for the rest of the country.
Previously, it had remained higher and more erratic than the national rate of insolvency.
Experian’s data also indicates a slight year-on-year improvement in the financial solidity of businesses in the automotive industry, as measured by its average distress score.
The score predicts the likelihood of a business failing in the near future, with 100 being the least likely to default and one being the most likely.
Mark Nuttall, general manager of Experian’s automotive business, said: “During the first six months of this year, the average distress score for the industry had been improving and has been fairly stable since June.
“This latest data suggests that automotive businesses are proving to be far more resilient than businesses in some other sectors.”
Nuttall said that while the scrappage scheme had a positive effect on the industry as a whole, the figures show that the financial distress levels among automotive businesses had started improving before the scheme was introduced.
He added: “Many UK businesses are monitoring the health of suppliers, customers and partners, as well as themselves, in order to ensure they do not suffer from the impact of another business becoming insolvent. This is something that automotive businesses also need become more aware of.”