According to the information services company Experian, the number of Motor industry businesses going bust fell by 22.3 per cent in 2007.

Kirk Fletcher, managing director of Experian's Automotive division said: “The annual figures may indicate an optimistic end to the year, but this is far from the case and the final quarter gives a truer picture. “The fact that the declining rate of business failure dropped off markedly as the year progressed – to virtually nothing by the final quarter of the year – suggests that 2008 could see the failure rate rise again.”

Small dealers are facing tough trading conditions and many are struggling with larger dealers swallowing smaller ones struggling to remain in business, he said.