CBI supports SMMT call for government action
SMMT’s call for government action to support the automotive industry following the impact of the global banking crisis has received the backing of the CBI.
Commenting on proposals by SMMT, the CBI’s director general, Richard Lambert said, “The credit crunch is having an increasing impact on cash flow and inventory finance across industry. Wholesale vehicle finance plays a critically important role in the motor industry supply chain, and the CBI backs the SMMT in its proposals to improve liquidity in this and other areas.
“This is not a call for a blanket bail-out for the industry, but rather for a careful targeted programme to support this vital part of the manufacturing economy through the current difficult times.”
The automotive sector is calling for support measures to include:
· Allowing manufacturers’ finance companies access to the funding available to banks through the special liquidity arrangements. This wouldhelp them to support customers and their franchise networks.
· Scrapping plans for increased VED and new first year rate. This would provide a strong signal to buyers and help to improve residual values.
· Increased capital allowances for fleet buyers, particularly for buyers of commercial vehicles, to stimulate immediate demand.
· Shelve plans for reform of business car capital allowances, as overall impact and timing is unhelpful.
· Remove expensive car restrictions under capital allowances to help demand for UK higher end manufacturers.
And, manufacturing support to include:
· National arrangements to allow manufacturers and suppliers access to loan facilities, including potential government guarantees, to maintain liquidity and investment.
· Help to speed up the allocation of existing funding to support training, R&D projects and energy efficiency measures. This would help upskill employees, accelerate innovation and provide an immediate stimulus for green collar jobs.
