The business secretary Lord Mandelson last night admitted that talks with Jaguar Land Rover about a £1 billion financial bailout are intensifying.
“I have had discussions with the owners and management of Jaguar Land Rover in particular, because they argue that they are under particular strain,” said Mandelson.
“Governments need to support the automotive industry,” JLR’s chief executive David Smith told Autocar on Wednesday evening. “A deal is needed. Dealers and suppliers are finding it very difficult.”
Mandelson said the government was analysing the situation “very carefully.” But the business secretary added that primary responsibility for JLR lies with its Indian owner Tata. He warned that the government did not have “an open chequebook.”
JLR boss Smith confirmed the British car makers had funding from Tata in place and said he was very confident about the future, despite the tough economic climate.
The British firm’s major UK automotive research and development centres underpin its pitch for government money. JLR has pledged that the centres will develop green technology for the future.