Strong UK manufacturing performance could be hampered by a lack of credit availability as the British financial sector looks to match the current success of domestic output, says one Automotive Council member.
Access to credit has long been a contentious issue in the UK, but with a slow economic recovery under way, its importance has once more taken centre stage.
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“We have to recognise there are some market failures,” said purchasing risk and supply chain manager, Jaguar Land Rover and Supply Chain Group (Automotive Council) member, Michael Mychajluk, at last week’s SMMT-organised, Meet the Funder day in the UK Midlands region.
“The growth in double digits is outstripping credit availability, so therefore some level of assistance is going to be required. If the assistance is not there, you are going to lose out to foreign imports.”
Despite that reservation, Mychajluk stressed the importance of the financial industry in backing the automotive sector as it continues to post such strong growth.
“There is a role for the banking sector to build confidence and capability,” he said. “The automotive industry is going through a complete age of innovation.
“When the Automotive Council was set up, it [UK manufacturing] was in a period of decline and it was set up to reverse that decline, so you may claim [it] has had a level of success.”
Mychajluk added the UK was also benefitting from the situation of the Pound, noting Sterling’s position was “pretty much where we want it,” while also taking time to praise the British government’s stance towards the automotive sector.
“Support from the government has changed 180 degrees,” he said. “That filters through in the supply chain.”
