Skip To The Main Content

Motor industry rescue plan explored

by  | 

A possible bail-out of the motor industry through a bolstering of its finance arm is being mooted by ministers.

Business Secretary Lord Mandelson hinted at the plans in response to a report in the Times calling on the Bank of England to extend its special liquidity scheme to motor-based finance firms in order to reinvigorate the car-loan market.

But Lord Mandelson said he did not believe the car industry in the UK needed a bail-out at this time, explaining though there were difficult times ahead, the sector was not a weak one.

The Government needs to consider how to help car makers "and what was the best use of the resources we want to put into this industry", he added.

During a visit of a Ford engine plant in Bridgend, south Wales, Lord Mandelson said he was enthused by the progress in the area of research and development.

He recently told MPs that talks were continuing with representatives from the industry to look at what help could be offered to aid struggling car makers through the collapse in demand for new vehicles amid the economic downturn.

© Press Association 2009