News

Car makers wait on Government help

  • Manufacturers want 4 billion
  • Lord Mandelson told companies will collapse
  • European Investment Bank is most likely savour
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Britain's car industry bosses are waiting to find out if crisis talks with the Government will lead to a 4 billion bailout as vehicle sales continue to slump.

The Society of Motor Manufacturers and Traders chief executive, Paul Everitt, headed a representation to Business Secretary Lord Mandelson last week, warning that some car makers are close to collapse.

Everitt said: 'Losing people is the last option for us, but clearly if we have no access to finance then we are put in a very difficult position. Companies will run out of cash sooner or later.'

The car makers want:

  • Their finance companies to have access to funding that has been made available to struggling banks.

  • Increased capital allowances for fleet buyers, to stimulate demand.

  • Support for the European Investment Banks proposed 40 billion automotive industry loan package

  • Loan facilities to be set up for suppliers, so that they maintain liquidity.

  • Already-approved funding earmarked for research and development to be rushed through

Lord Mandelson has agreed to investigate the proposals, although he is thought to have suggested the European Investment Bank should fund the bailout. However, the car makers have warned this could take too long for some manufacturers to survive.