Mandelson considers car loan aid

BBC: The UK car industry does not need a bail-out but the government is considering help for manufacturers' financing arms, Lord Mandelson says.

He told the BBC that the industry faced problems raising finance to help would-be buyers fund new car purchases. 

Lord Mandelson said the credit crunch has meant that manufacturers' car financing arms could not raise the money needed to fund new car purchases.

"No car company is asking for a bail-out, they may be asking for help in lifting their motor finance arms, needed to fund new car purchases," he told Radio 4's The World At One.

"And it may be that in one case, commercial loans or loan guarantees from the government to assist them to bridge a very difficult period (may be needed) but that is not what I would call a bail-out."

He said both he and the Treasury were in close contact with the car companies about this issue.

In the US, as part of its rescue of the car industry in December, the government has unveiled a $6bn (£4.1bn) rescue package for GMAC - General Motors' troubled car loan arm. 

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