UK Business Secretary, Mandelson to unveil loan package for car industry

The UK Business Secretary, Peter Mandelson will meet UK car makers for the second time on Wednesday to find ways to help the car industry cope with the economic downturn, which has strangled credit from banks and other financial institutions leading to plummeting vehicle sales and job losses.

The British government has often said that it will not let the car industry in the country to collapse due to the economic slowdown as it had a good future and was a permanent and integral part of the nation's manufacturing base although it has taken an eternity to come up with a viable solution to help the auto industry in face of job losses, part closing manufacturing bases and sending workers on long leave.

Mandelson is expected to announce a multi-million pound rescue package for the ailing car industry although the details will be known only after the meeting with the executives of car manufactures on Wednesday.

The rescue package, according to the British media may possibly entail allowing car manufacturers to approach the Bank of England and avail of its special liquidity scheme, where it can swap car loans for liquid assets.

In November, the auto industry had held talks with the government and discussed measures to help the UK car industry by making accessing of car loans to be made easier for customers so that they can be enticed to buying cars.

Last month, the UK car makers represented by the Society of Motor Manufacturers & Traders, had written a letter to the Chancellor, Alistair Darling and also spoke with Mandelson, asking for the government to increase it's spending to help the domestic car industry and also tax relief's as also made an urgent demand for state aid of £2 billion to £3 billion.