Wednesday, 15 February 2012

Insolvencies in the motor sector more than doubled in the final quarter of 2011, according to figures released by the Insolvency Service.

The figures show that administrations have increased 120 per cent from Q3 to Q4 2011.

Graham Bushby, head of motor at Baker Tilly Restructuring and Recovery LLP, said the figures reflected the need for further consolidation in the sector.

“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.

“There is now a growing acceptance that there are too many dealers for the size of the market and we are likely to see the trend continue."