UK carmakers receive funding for fuel-efficient vehicles

| April 7, 2009 | 0 Comments

UK carmakers, Jaguar Land Rover and Nissan, have today received £720 million worth of funding, in return for investing in cutting vehicle emissions.

The funding was approved by the European Investment Bank (EIB), the EU’s main source of long-term lending, and is the first such package provided to any carmaker.

Jaguar Land Rover was awarded £340 million (€366 million), while Nissan was given £380 million (€419 million). The latter will be split equally between plants in Sunderland and Spain, with both companies having to invest in new technology, as required under EIB rules.

Business Secretary Lord Mandelson said: “This is good news and offers the opportunity for real help for UK car companies.”

The loans are part of the £2.3 billion funding announced by Lord Mandelson at the end of January, designed to help the UK’s ailing car industry.

Approximately 12 million people are employed in the European car industry, with around 800,000 workers in the UK.

In related news, figures released yesterday by the Society of Motor Manufacturers and Traders revealed a fall of 30.5% in March UK car sales, compared with the same month in 2008.

In response to the fall in demand for cars, other European countries have introduced a car-scrappage scheme, which is proving successful. Germany reported a 40% increase in new car sales last month.

The scheme, which pays consumers to get rid of their old cars and replace it with a more environmentally friendly car, has so far been rejected by the UK Government who said it was “unsure whether it would offer value for money”.

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