Jaguar Land Rover, owned by the Indian firm Tata, now has a £27 million pot available from taxpayers, to build an environmentally friendly car, part of an attempt by the government to bolster the distressed industry.
The funds can be used when Jaguar, says it will start making the lightweight, condensed, Land Rover LRX. The LRX would be built at Land Rover’s Merseyside Halewood unit. The venture will cost £400m and later this year a decision will be taken about starting production.
The funding was announced while ministers met representatives from the industry, union leaders and bankers about a £2.3 billion fund, comprising £1 billion in government loan guarantees and £1.3 billion as loans from the European Investment Bank. The Automotive Assistance Programme is a means of avoiding the demise of the British automotive industry. Executives were pleased with the first portion of aid, but said it may not be enough.
The government says it is essential that this financial support does go to companies in the automotive business. This industry is crucial to pulling the economy out of depression. It gives jobs to numerous very skilled people who will build fuel-efficient cars for the future world market, he added.
Rolls Royce Motor Cars CEO, Tom Purves, said government assistance was needed but may not be enough. It is a disaster when the international market falls by 30% or 40%.
Erik Eberhardson, heading a management buy-out of Birmingham’s LDV vans, said the government is supporting the slow movers in ecofriendly technology. We need specific assistance for our development of electric vehicles or a world leader in low carbon design may go down, he commented.