Car manufacturers have given a cautious welcome to the Government's car industry support package announced by Lord Mandelson yesterday, following a meeting with the Business Secretary today.
However Society of Motor Manufacturers and Traders (SMMT) chief executive Paul Everitt has underlined that the issue of providing credit to the finance arms of car manufacturers must be resolved within weeks if the car industry is to emerge undamaged from the recession.
'Following our meeting with Lord Mandelson today we hope to have our first meeting with trade and investment minister Mervyn Davies this week to try and resolve this in time for the March market,' said Everitt.
'We must act swiftly: the car industry is a competitive business. We need to secure and protect our position as a healthy UK industry so that, in three years' time we are still in good shape, and ready to lead on future technologies. We do not want the industry damaged in the long-term because we haven't acted now.'
The government is reported to be responsive to requests from car company's finance arms for credit, in the same way banks have been bailed out. However, the process is being delayed because financial regulations forbid anyone but banks accessing Bank of England funds.
SMMT president Joe Greenwell said: 'The good news to come out of today is that the government is trying to help. However, we are operating in real time so the process of providing aid has to be swift and productive.'
Other issues discussed with Mandelson included the possibility of introducing a scrapping scheme similar to those recently introduced in France and Germany, where new car buyers are offered subsidies of up to 2000 to scrap older, more polluting cars with new, more efficient ones.
Everitt concluded: 'We do feel more confident. Following today's meeting we have more clarity on how yesterday's announcements will work and the Government has shown a willingness to support our industry in the short term and protect its position of global competitiveness in the medium to long term.'