Dealer liquidations increase

The number of motor vehicle and parts retailers placed into liquidation in the past year has increased by 53 per cent from the previous 12 months, according to a new report from Centrix.

While the credit bureau does not provide numbers for each trade category, it notes 219 firms in the retail sector overall entered liquidation in the past year. This was up by 37 per cent from 160 in the previous year.

“[Retail] performance remains mixed, with fuel, motor vehicle and hardware retailers under continued pressure, while recreational goods retailers are showing signs of recovery,” adds Centrix in its May credit indicator report.

The retail trade sector includes more than 43,000 registered companies, representing nearly six per cent of all businesses nationwide. 

Centrix says that means the number of liquidations in the past year equates to 0.5 per cent of the sector.

Liquidations for fuel retailing businesses increased by 50 per cent year-on-year.

The hardest hit retail industries were hardware, building and garden supplies, with liquidations rising by 67 per cent, and pharmaceutical and other store-based retailing were up by 175 per cent.

Vehicle finance

The Centrix report did bring some good news for the automotive industry as arrears on vehicle loans improved to 5.3 per cent of active credit accounts in April, down from 5.6 per cent in March.

The shift came at the same time credit card arrears fell to four per cent to be nine per cent lower than a year ago.

Mortgage arrears also improved from 1.39 per cent to 1.29 per cent in April, with 21,100 home loans past due.

Monika Lacey, chief operating officer, says: “Arrears across mortgages, personal loans, credit cards and auto lending are all trending down, suggesting stronger repayment behaviour overall. 

“However, this recovery is not being felt equally. A portion of borrowers remains under financial stress, with some households still struggling to keep up with repayments.”

Centrix adds consumer credit demand fell 1.9 per cent year-on-year in a softer economic environment, with continued strength in automotive, personal and home loan enquiries offset by weaker demand elsewhere in May.

Demand for automotive loans grew by nine per cent, while mortgage and personal loans rose by 11.3 per cent and 5.7 per cent respectively.

In contrast, consumer appetite for credit cards fell by 15.9 per cent year-on-year.