The Society of Motor Manufacturers and Traders (SMMT) has welcomed the UK government's announcement from the Department for Business, Enterprise and Regulatory Reform (BERR) activating the GBP2.3bn of loan guarantees announced in January, but urged government for immediate action on outstanding proposals aimed at stimulating market demand.
 
"The clearance of state aid to support the automotive sector is an important step in sustaining the UK motor industry, but the need for short-term measures to kick-start demand in the market remains critical," said SMMT chief executive Paul Everitt.
 
"There is a real need to ease consumer credit and attract customers back into showrooms and we urge government to move quickly and implement industry proposals," he continued.
 
"Across the EU, member states have introduced scrappage incentive schemes which have already proved successful in their ability to stimulate demand and minimise the impact on manufacturing and retail jobs. It is vital the UK government reflects the action and pace of support given across Europe to ensure the UK remains globally competitive."
 
Following approval by the European Commission, automotive companies throughout the supply chain can now begin accessing the GBP1bn of UK loans and loan guarantees and the GBP1.3bn of European Investment Bank (EIB) funding announced on 27 January 2009. However, eligibility criteria and access routes are still to be clarified, SMMT says.
 
"Immediate clarity is needed on all available funding schemes to ensure the support reaches those who need it as a matter of urgency," says Everitt.