British-based carmaker Jaguar Land Rover is reportedly in talks with the UK Government over a £1bn loan. The plea comes just nine months after the carmaker was brought by India’s Tata Group.
Reports suggest Tata is looking to the Government for a bridging loan for the next 24 months, as the company looks to survive the tough economic conditions affecting the motor industry.
The two cars marques have remained in the UK despite being sold by Ford in March for £1.5bn but have seen new car sales tumble by 50% over the past year. Tata is now under pressure to increase sales, in order to pay off its $3bn (£2bn) bridging loan it took out to complete the acquisition from Ford.
The move comes as Jaguar Land Rover chief executive, David Smith, refused to rule out large scale redundancies in its UK plants.
The company has already announced 600 voluntary redundancies this year, and Smith says: “I hope demand picks up so we don’t have to make any more.”
The group employs 15,000 workers in the UK. Last year, Land Rover produced 230,000 vehicles at its Solihull plant in the West Midlands while Jaguar made 54,000 cars at its Castle Bromwich plant and at Halewood on Merseyside.
Jaguar Land Rover is the latest carmaker to ask for a government-funded bailout. General Motors, Ford and Chrysler are also in talks with US government officials for financial aid, but have been told to prove they have viable recovery plans before they will receive the cash.