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Weak consumer confidence blamed for 120% rise in administrations

A continued lack of consumer confidence saw UK automotive insolvencies increase by 120% from Q3 to Q4 in 2011, according to the latest statistics from the Insolvency Service.

Graham Bushby, head of motor at Baker Tilly Restructuring and Recovery LLP, said: "As well as small unfranchised dealers feeling the downturn, there have been a number of well-known independent franchised dealer groups who have gone into administration.

"Earlier in the economic downturn manufacturers were more willing to support struggling dealers through agreeing lower targets for new car sales or even through advancing cash."

Bushby believes there is now a growing acceptance that there are too many dealers for the size of the market and the trend for administrations looks set to continue into Q1 2012.

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  • racer47 - 06/02/2012 20:04

    That is no doubt true, however there are still far too many dealers that offer an unacceptable level of service. They lose interest once the car is sold, don't keep in touch with customers, don't manage their database, have a lax attitude to customer service and fail to prepare for customers properly, hence poor rates of first time fix and unhappy customers that vote with their feet. You just need to look at the market share in Aftersales that the likes of Halfords are taking at the moment and its not difficult to see why some of the franchised dealers are struggling. I appreciate that product issues and franchise costs don't help, but when will we start managing businesses properly instead of allowing a Sales Manager to run the show, which is what most DP's are.