The government has kept the car industry in the dark over this afternoon’s announcement of a financial aid package.
Lord Mandelson will reveal details of the package in the House of Lords on Tuesday afternoon at 3pm, pre-empting tomorrow's meeting with car makers. It is still unclear whether the meeting will go ahead.
“There’s been no contact between the government and the car industry since November, so we’re going to find out what’s in the package when we watch TV this afternoon,” said an SMMT spokesperson.
“At the moment, though, we’re also working on the basis that tomorrow’s meeting will still happen,” the SMMT added.
The centre of the package is believed to be a change of rules to allow car finance arms to benefit from the “special liquidity arrangement” extended to the banking sector before Christmas, which currently excludes consumer credit operations.
That would get low-cost finance flowing into car maker and dealer finance arms to stimulate new car sales.
Government is thought to have been spurred into action by a succession of grim news from the car industry, including 1200 job losses at Nissan, Europe’s most-efficient car plant, Honda’s decision to stop production at Swindon for five months and short-time working at Bentley, Aston Martin, Mini and Toyota.
There’s also still no word on whether this afternoon’s package will be linked to green investment in low-carbon engines and technology.
“We would welcome that,” said a source at Jaguar. “If we have to allocate funds to keeping the business going, we can’t also invest in green technology.”
The company has stressed it is not looking for a cash handout to beef up its balance sheet, but for help to get the market for car finance working again.
Lord Mandelson may have been nudged in the right direction last week when a British trade delegation visited Bombay, home of Tata, owner of Jaguar Land Rover.
Several Tata directors and managers attended a dinner, although it’s unclear if specific talks were scheduled.