Suppliers in Europe, facing a cashflow crisis and potential bankruptcies after the auto industry’s summer shutdown, want the European Union to provide up to EUR3bn in loans, the Financial Times reported.
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The industry wants Brussels to launch a pan-European scheme to help suppliers and also to speed up payments for parts from their customers.
A 25% slump in car sales in the first half of the year has meant suppliers have already used up any cash reserves and are finding it increasingly difficult to borrow from banks that have reduced their exposure to the automotive sector, the FT said.
CLEPA, the European suppliers trade body, has asked Brussels to respond by Friday. CLEPA CEO Lars Holmqvist told the FT: “Under normal circumstances, September is a tough period. This year it’s going to be hopeless.”
The group estimates that more than 1,000 of Europe’s roughly 5,000 auto supply companies are in immediate danger of bankruptcy, and that thousands more are distressed.
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