BVRLA lobbies for parity on finance availability for lease firms
05 February 2009
Author: Tom Webster
The BVRLA is calling for smaller leasing firms to be given the same access to finance as their larger bank-owned rivals as part of the Government's plans to rescue the UK car industry.
The leasing industry association has written to the business secretary Lord Mandelson to ensure he treats both the larger bank-backed lease firms and smaller independents equally.
"There has been a lot of talk from the Society of Motor Manufacturers and Traders about helping the finance arms," said a BVRLA spokesman. "But we want to make sure they don't forget the non bank-owned firms."
The move comes in the same week that leading automotive industry expert Professor Peter Cooke predicted a year of consolidation within the contract hire industry coupled to residual value write-downs.
Speaking at the launch of a report on the recession and residual values, Cooke said: "We will see a lot of consolidation in the year ahead, particularly of the sub-10,000-vehicle players going in with the bigger groups.
"I would also expect lease firms to announce RV write-downs," he added commenting on the unpredicted crash in used-car prices last year.
The £2.3bn of aid allocated to the UK motor industry last month did not specifically provide for leasing firms, as it was aimed at green product development and employee training for manufacturers. Instead, Mandelson instructed trade and investment minister Mervyn Davies "to draw up a plan for improving their access to finance".
The BVRLA said its bank-owned members already had access to the Bank of England's "special liquidity fund". This enables them to get money for assets that cannot be easily turned into cash.
The BVRLA letter also called for the introduction of a scrappage scheme that would see incentives offered to motorists to trade-in their old, high-polluting cars for new ones. A similar system was run in Germany that offered participants ?2500 for trading in cars more than nine years old.