Business Secretary Peter Mandelson will meet UK carmakers on Wednesday (January 28) to discuss possible measures to help the ailing industry survive the economic downturn. It is the second time Mandelson has met with industry representatives.
The Department for Business Enterprise and Regulatory Reform (BERR) says the meeting will not focus on a state bailout, but will look at how the car company’s own credit businesses could be assisted in terms of additional liquidity needs.
In a statement, the department says: “A package may or may not be announced. No decisions have been made yet. Potentially, various options will be discussed.”
A range of possible measure of expected to be discussed, including easier access to car loans to entice reluctant motorists back into the showrooms.
The new meeting comes after renewed pressure form the Society of Motor Manufacturers and Traders. The SMMT noted that a total of 53,823 cars were manufactured in the UK in December 2008, a fall of 47.5% from a year earlier, meaning 1.45 million were manufactured in 2008 as a whole, a decline of 5.7%.
A number of car makers including Nissan, Honda and Jaguar Land Rover have cut production and jobs recently as a result of the economic downturn and the SMMT wants the government to step in and improve consumer access to credit in an effort to boost demand.
Paul Everitt, the chief executive of the SMMT, says: “The automotive industry is of strategic economic and social importance, reflected in the measures to support the industry being discussed by governments across Europe and around the world.”
“SMMT has been in close discussion with UK government on the urgent need to improve access to credit and kick-start demand in the market, in order to sustain valuable industrial capability during this exceptionally difficult period. SMMT is looking forward to meeting with Lord Mandelson before the end of January to receive Government’s response to the proposals we submitted at our November meeting.”
The UK meeting comes after General Motors and Chrysler received a
$17.4bn (£12.6bn) from the US government late last year, and the French government is also looking to take a direct stake in its car industry.
Last Friday, Jaguar-Land Rover chief executive David Smith called on the UK Government to “put oil back into the engine” of automotive companies.