The SMMT claims that a lack of finance is acting as a constraint to the growth of UK automotive supplier companies. Over the last few years there have been many complaints from UK industry that the banks are not lending sufficiently, to the detriment of UK economic growth. The banking sector itself remains nervous of lending after the financial crisis of 2008/9 and are building reserves. Current uncertainties regarding the eurozone and banks’ exposure to sovereign debt aren’t helping either.
The SMMT has previously voiced concerns over a lack of available finance for automotive suppliers. The relative health of the UK’s automotive sector at a macro level lately (car production and exports up) may well give the SMMT some political leverage in publicising the issue of the UK supply chain’s structure and fragility. Lending to industry is obviously of concern to the UK government as illustrated by the recent Bank of England initiatives to boost liquidity in the UK banking sector and increase lending.
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