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UK govt to meet with car industry

2009-01-27 06:36

London - Representatives of Britain's motor industry will meet business minister Peter Mandelson on Wednesday to discuss ways to help the beleaguered sector, prime minister Gordon Brown's spokesman said on Monday.

The meeting is a follow-up to talks held between the two sides last November and possible measures to be discussed include easier access to car loans to entice reluctant motorists back into the showrooms.

Brown's spokesman declined to give details of Wednesday's agenda.

"I think you will have to wait and see," he told reporters. "The government does believe the car industry is a sector with a strong future and we are determined to ensure that the car sector remains a permanent and important part of our manufacturing base.

"We are working on further action to help the sector through the economic downturn and he (Mandelson) will be discussing what more can be done at the meeting."

The industry has made clear it does not want a bank-style taxpayer bailout, preferring instead to call for measures including the resumption of direct lending, state-backed loans or short-term funding to subsidise layoffs.

It suffered its sharpest fall in output in nearly 20 years last month, with production barely half that of 12 months earlier, Society of Motor Manufacturers and Traders' (SMMT) figures showed.

"The dramatic fall in demand for new vehicles around the world, combined with the limited availability of funding and liquidity now puts at risk valuable industrial capability," the SMMT said in a statement.

"Urgent action is required to boost demand for new vehicles and ease the short term cash flow pressures on UK automotive manufacturers and suppliers."

Carmakers have had to cut production and jobs sharply after falling demand both at home and abroad, including 1 200 jobs at Japanese carmaker Nissan's Sunderland plant.

Mandelson was in India last week and had talks with Tata Motors, owners of luxury car maker Jaguar Land Rover which announced 450 job cuts two weeks ago due to falling demand.

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