Loans set for green car firms

3 February 2009

03 February 2009 | Jake Kanter

Suppliers to the automotive industry will benefit from the £2.3 billion support package unveiled last week by the British government.

This will establish a temporary framework with the European Commission to provide loans to manufacturers and suppliers with a turnover of more than £25 million a year.

The loan guarantees will be targeted at those vendors working to reduce carbon emissions and cut energy consumption, and will apply to production projects worth over £5 million.

The industry's association believes the funding will have no effect on relationships between the vendors and buyers they supply. The money should not cause a lack of competition, as many firms will be attempting to access the loans.

"So many companies are struggling to access credit that it will have no impact," said Nikki Rooke, spokeswoman for the Society of Motor Manufacturers and Traders.

Business secretary Peter Mandelson said the package would help firms become greener, more innovative and more productive.

"This industry is not a lame duck and I am not proposing a bail-out. Britain needs an economy with less financial engineering and more real engineering."

SMfeb2009

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