Car-makers Optimistic On Back Of Hopes Of Better Credit Availability

A survey of UK car-makers has revealed that almost two-thirds of them (62 per cent)

expect the availability of credit to remain the same or improve in the coming 12 months. The industry is also well aware of the government funding available to help them ride out the economic storm. Almost two-thirds of manufacturers (63 per cent) claim to have a good understanding of grants and incentive schemes available to help them. One-third of manufacturers also say they have raised money from other sources, such as shareholders, or parent companies.

David Raistrick, UK manufacturing industry leader at Deloitte, which helped compile the survey, said the report concluded that, while the market is tough, manufacturers responses had been resilient. It further welcomed the signs of car-makers acknowledging that they could not be complacent, and the revelation that nearly two out of three had stepped up their level of credit checks on customers in the past year.

One area singled out for improvement was publicity of available grants for manufacturers, with a significant minority unaware of possible sources of support, and nearly one in five saying grants had not been considered as a means of boosting funding. Raistrick commented that, with 40 per cent of manufacturers either not knowing where to find information on available grant funding, or having not considered it, it was likely that some would be missing out on help which was potentially easily accessible.

In an important positive sign that car-making was preparing itself for better times, more than half of manufacturers questioned said they planned to spend on new or improved machinery in the next year, and a similar proportion said they would also be pumping cash into developing new products.

This showed that the UK car-making was keen to either maintain or step up investment in products and plant, Raistrick said. He added that this should mean that British car-makers would play an important role in leading the country out of recession and, in the longer term, is planning for a future in which major investment in new factories and equipment, training and upgrading the skills of existing workers, and research and development in general, would play important roles. Exports are seen as a key area where UK car companies would be concentrating their efforts in order to step up their activity, the survey showed.

Nearly three-quarters (71 per cent) of respondents were expecting to increase their exports over the next 12 months, with 41 per cent aiming to raise production by 10 per cent or more. Seventy-five per cent of manufacturers will place the Eurozone at the heart of these increased efforts. The other key regions identified were the USA and China, with 45 per cent aiming to increase business with the former, and 30 per cent of those questioned confident of better results in the latter.

by: Jamie Francis

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