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CBI supports SMMTcall for government action

91ÖÆƬ³§¹ÙÍø’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 91ÖÆƬ³§¹ÙÍø, 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 SMMTin 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.