Visit the global automotive industry news blog with European automotive industry news.
Dr. Juergen Weber
Need an office in Europe or Eastern Europe? Office suites, meeting rooms, virtual offices, network access
EUROPE: "October 2010 West European Car Sales" review. 3-page review by J.D. Power Automotive Forecasting.
proceed to download
backEUROtalk July, 2012
Survey Finds Payment Default Occurs with 2% of Receivables in Eastern Europe
Over 30% of B2B receivables paid late.
Businesses in Eastern Europe express concern over a likely deterioration of the trade credit risk outlook over the next six months, and anticipate intensifying their efforts to protect against payment delays and payment defaults by B2B customers. According to the June Atradius Payment Practices Barometer ( http://global.atradius.com/paymentpractice/list/paymentpractices.html ), more than three times as many survey respondents in Eastern Europe expect deterioration of trade credit risk over the next six months than expect improvement. To reduce payment delays and payment defaults, over half of the survey respondents in Eastern Europe anticipate increasing their active credit management.
The Atradius survey interviewed 820 businesses across 4 countries in Eastern Europe (Czech Republic, Hungary, Poland and Slovakia). 29.0% of the survey respondents expect deterioration of trade credit risk over the next six months while only 9.5% expect improvement. Czech Republic recorded the highest percentage of respondents expecting deterioration of trade credit risk over the next six months (41.2%), followed by Poland (35.1%).
To reduce payment delays and payment defaults, and better protect their businesses against trade credit risk, over half of the survey respondents in Eastern Europe (53.4%) anticipate increasing their active credit management over the next six months, mainly using more frequent dunning (payment reminders) and creditworthiness checks of buyers. Poland and Slovakia (56% of respondents each) displayed the highest percentage of respondents who plan on checking the creditworthiness of their buyers more.
In these four countries, the instability of the economic climate has already resulted in an average of over 30% of the value of B2B receivables being paid late and about 2% being defaulted on. The primary reason is the buyer's lack of funds to pay. Slovakia displayed the most problems with overdue domestic receivables (35.7% of the value of domestic b2b receivables was overdue:overall survey average of 31.6%). Respondents in the Czech Republic recorded the highest percentage of foreign B2B invoices that was overdue (32.9% of the value of foreign b2b receivables was overdue:overall survey average 26.3%).
At overall survey level, an average of 2.6% of domestic B2B invoices and 1.8% of foreign invoices resulted in payment default. Survey respondents in Poland reported the highest average payment default rates from B2B customers (4.4% of the value of domestic B2B receivables and 4.1 of the value of foreign B2B receivables).
Consistent with responses in the survey of half year ago, insufficient availability of funds was cited as the primary reason for payment delays from B2B customers (87.3% of respondents reported it as the primary reason for domestic payment delays, 71.0% for foreign payment delays; 2011: 80.4% domestic and 69.5% foreign). This is not expected to change for the foreseeable future.
Thomas Langen, Senior Regional Director from Atradius Central Eastern Europe stated, "Insolvencies and payment defaults continue to be a major issue for businesses in Europe, due to the deep economic difficulties in a number of countries in the region. With economic contraction forecast for the Eurozone in 2012, real GDP growth is expected to slow considerably in the Central and Eastern European region compared to 2011. The smaller economies closer to the Eurozone, such as Hungary, whose domestic market performance is already poor, are most at risk. Managing trade credit risk and protecting the business from payment defaults are therefore essential to success. Respondents of the Atradius Payment Practices Barometer, for the most part, appear to be aware of the risks they are being faced with and are taking some of the steps important to success in a more difficult business environment. As a credit insurer, Atradius regularly engages in many of the measures reviewed in the survey on behalf of our customers, to help them protect their balance sheets ensure their livelihood."
The complete report highlighting the findings of the June edition of the Atradius Payment Practices Barometer focussing on Eastern Europe can be found in the Publications section of the Atradius.com website.
Source: The Atradius Group - GAI
Russia’s parliament ratifies WTO entry
read on
European car manufacturers voice concerns on 1st anniversary of EU-South Korea FTA
read on
Vehicle makers urge EU to act upon CARS21 recommendations on strengthening the future of the auto industry in Europe
read on
Europe needs car Tsar to lead output slash, head-off national bailouts
read on
An overview of the Russian and CIS automotive industry
read on
Electric cars fail to win over Germans
read on
Electric Vehicle Charging Equipment Sales in Europe to Reach Nearly $1.3 Billion by 2020
read on
June 2012 West European Car Sales
read on
Eurozone factories feel heat in June, job cuts rise
read on
European Industrial Production Mixed in May
read on
Italy: A surprising ruling of the Rome labor judge brings protection against anti-union discrimination to previously unseen levels
read on
Expats, Russians Search for a Common Language
read on
Spain: Reduction in force and collective lay-off appeal in Spain: A new era after the labour reform
read on
Employees and Employment Contracts in Russia
read on
Data theft risk increases in Central and Eastern Europe countries
read on
UK: Industrial action contingency planning
read on
European Union Seeks Input From Business on Proposed EU-Vietnam Free Trade Agreement
read on
Russia: Pre-Arrival Notification of Imported Goods in the Customs Union
read on
Russia Manufacturing Expansion Weakens In June
read on
Survey Finds Payment Default Occurs with 2% of Receivables in Eastern Europe
read on
UK: Olympics Create Mobility Issues in London
read on
What Does Standard of Living Mean in Eastern Europe?
read on
European real estate: navigating the sovereign debt crisis
read on
Germany Sees Substantial Increase in Immigrant Numbers
read on
Turkey Moves to Invest Massively in Nigeria's Steel Sector
read on
France: Waiver of corporation tax not state aid, CJEU finds
read on
Germany: Cross-border profit allocation, hybrid entities, CFC rules
read on
Poland: Pilot program grants for invention projects
read on
Europe update: global headlines
read on
subscribe to eJournals
View our blogs:
The Asian Automotive Industry Market
The Brazil Automotive Industry Market
The Chinese Automotive Market
The European Automotive Market
The Global Automotive Market (HR edition)
The Indian Automotive Market
The Mexican and Latin Automotive Market
The U.S. Automotive Market
To visit GlobalAutoExperts Directory, click here.