One Sunday newspaper has said that the government is set to step in after senior industry figures met ministers last month.
The Sunday Times believes that there are a ‘string of measures’ proposed to boost flagging sales in the pipeline. These could include loan guarantees for makers’ finance arms and low cost loans.
But the Mail on Sunday isn’t as convinced. It reported Treasury sources said no firm proposals for a rescue package were in place.
The credit crunch has hit the car industry particularly badly with many makers halting production for extended periods over Christmas. Some have cut hundreds of jobs too in an attempt to save cash.
Car manufacturers are believed to want a state-guaranteed credit facility, more credit for manufacturers and suppliers, easier access to cash for car finance firms and a delay in the rise in vehicle excise duty, the BBC News website has reported.
The Sunday Times has quoted one unnamed senior car industry executive saying that he ‘feared the worst’ is on the horizon.
‘There will have to be layoffs, and there is a real danger of a clearout among component makers, who are finding it more and more difficult to get funding,’ the source told the paper.
The weekend’s news follows the shock announcement by Vauxhall last week that it has offered workers a sabbatical on 30 per cent pay for up to nine months.
General Motors, which owns Vauxhall, is in a dire situation with company chiefs pleading for cash in the US. It says the sabbaticals would avoid redundancies.