The Indian owners of Jaguar Land Rover (JLR) have agreed to pump “tens of millions” of pounds into the luxury car brand to prevent a cashflow crisis, it was reported today.
The additional cash from Tata Motors, which bought JLR earlier this year, has bought UK government ministers breathing space as they consider whether to provide state support for the ailing West Midlands-based manufacturer, reported the Financial Times.
Tata was said to be adamant that its support for its UK subsidiary did not negate its argument that the Government should provide bridging loans and credit guarantees to help the company and the car sector as a whole through the current financial difficulties.
Following the US government’s announcement of a $17.4bn (€12.4bn) loan for American car-makers last week, Business Secretary Lord Mandelson has come under pressure to come up with a similar package for UK manufacturers.
Unconfirmed reports in today’s Times suggested that ministers were preparing for a bail-out involving hundreds of millions of pounds, possibly in the New Year.
But Mandelson yesterday said that JLR will have to pass “tough tests” before it gets any help from the British Government.