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UK automotive insolvencies drop in May

The rate of business insolvencies for the automotive industry almost halved from 0.12% in May 2009 to 0.07% in May 2010, according to the latest Insolvency and Late Payment indices from Experian, the global information services company.

As well as seeing a year-on-year fall, the rate dropped from 0.08% last month to 0.07%, a low not seen since December 2007.

The financial strength of the automotive industry also saw a slight improvement both year-on-year and month-on-month, going up to 79.71 from 79.31 in May 2009 and from 79.67 in April 2010.

However, automotive businesses saw a slight increase in late payment with automotive businesses paying their bills 16.67 days after agreed terms in May last year, rising to 16.86 days late in May this year.

Mark Wilkinson, sales director for Experian Automotive business, said: “The decline in insolvencies and improvement in financial strength in May is a good result for the industry in the current economic climate.

“Feedback from automotive businesses in the UK is that chasing debt is a key issue. For the financial strength of the industry to remain buoyant, keeping in touch with supplier terms, and managing risk around those, will remain key.”

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