The rate of business insolvencies in the automotive industry fell by 44.15% in January, according to the latest insolvency and late payment indices from Experian, the global information services company.

Payment performance amongst automotive businesses, itself an indicator of business confidence, also improved throughout January.

Automotive businesses have managed to shave a day off the time it takes to settle bills, down to 15.36 days beyond agreed terms from 16.72 in January 2009.

The automotive industry continues to be among the quickest to settle bills, slower only than the agriculture/forestry/fishing, oil and servicing/repair sectors.

The financial strength of the automotive industry also increased year-on-year, going up to 79.91 from 78.78 in January 2009.

Mark Nuttall, general manager of Experian’s automotive business, said: “The automotive industry has seen a good start to the year.

“It is too early to say whether we are out of the woods yet. The financial strength of the sector is still recovering from a volatile 2009, however, the decrease in insolvencies and improvement in payment performance in January are both good signs for the industry.

“Irrespective of the economic climate, it is vital that dealers use business information tools to manage their exposure to risk by monitoring the health of their suppliers, customers and partners.”