SMMT chief Paul Everitt has echoed MP’s findings of ‘serious concerns’ over the car industry aid programme.
£2.3bn in loans and loan guarantees for the car industry was pledged back in January.
However, six months on, NO car companies have received any cash from the Automotive Assistance Programme scheme.
This, says the SMMT, is because the scheme is inflexible and too slow.
‘The availability of affordable finance and credit remains the number one priority for companies at all levels of the supply chain,’ said Everitt.
‘It is essential that a more flexible approach is adopted, so that viable businesses can access the working capital they need in the short term, and support investment in future technologies for the long term.’
As banks are also not lending to car companies, including car dealers, securing working capital is still a significant issue for most firms. This is despite the bold promises of the AAP scheme at launch.
The attitude of banks has not been helped by the removal of trade credit insurance, says Everitt. This makes them even more risk-averse.
‘Industry remains concerned that the reluctance of banks to provide direct support to the automotive sector is limiting the effectiveness of the programme and its benefit to companies in the supply chain,’ added Everitt.
Frustrating; after all, firms connected with the car industry employ 800,000 people in the UK, and add an annual £9.5bn to the economy…