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Car makers welcome aid package but want urgent kick-start
publication date: Feb 28, 2009
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author/source: Robin Roberts
The Society
of Motor Manufacturers and Traders welcomed the announcement from the Department for Business,
Enterprise and Regulatory Reform activating the £2.3 billion of loan guarantees
announced in January, but urged government for immediate action on outstanding
proposals aimed at stimulating market demand.
"The clearance of state aid to support the automotive sector is an important step in sustaining the UK motor industry, but the need for short-term measures to kick-start demand in the market remains critical," said SMMT chief executive Paul Everitt. "There is a real need to ease consumer credit and attract customers back into showrooms and we urge government to move quickly and implement industry proposals," he continued. "Across the EU, member states have introduced scrappage incentive schemes which have already proved successful in their ability to stimulate demand and minimise the impact on manufacturing and retail jobs. It is vital the UK government reflects the action and pace of support given across Europe to ensure the UK remains globally competitive." The UK has been given the go ahead by the European Commission to offer state help for the automotive industry under the Automotive Assistance Programme. The approval by the EC enables the government to support up to £1 billion of loans and loan guarantees as well as loan guarantees through the European Investment Bank (EIB) enabling funding of up to £1.3bn. The approval comes a month after Business Secretary Lord Mandelson announced the £2.3bn support package. Business minister Ian Pearson said: "We are grateful to the Commission for its swift response and approval of our state aid application. We welcome applications for the Automotive Assistance Programme that's now up and running. "We are committed to helping the car industry bridge to the low carbon future. Our package will support both manufacturers and larger automotive suppliers in delivering the new investment that will be vital in ensuring the industry comes out of the current downturn with the skills and technology needed to be competitive in the global automotive market." The Department for Business Enterprise and Regulatory Reform will be holding a seminar in the next couple of weeks to bring together industry, banks and the relevant trade bodies to make sure that the Automotive Assistance Programme application process runs as smoothly and effectively as possible. |
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