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Automakers Will Ask U.K. for Car-Finance Assistance (Update1)

By Sabine Pirone

Nov. 17 (Bloomberg) -- Automakers in the U.K. will ask the government for ``a package of measures to stimulate demand,'' including assistance for their loan divisions, the Society of Motor Manufacturers & Traders said.

The group, representing global carmakers including General Motors Corp. and Toyota Motor Corp., will send a letter asking for ``access to special liquidity vehicles'' as have been provided to banks, SMMT Chief Executive Officer Paul Everitt said today in an interview.

Measures are needed to ``mitigate the impact of the slowdown on manufacturers, their supply chain and dealers,'' Everitt said. A letter will be sent before the government's pre- budget report on Nov. 24, he said.

U.K. car sales fell 23 percent in October, the sixth consecutive monthly decline, as consumers refrained from making large purchases while Britain's economy headed for recession. The Wall Street Journal reported today that any assistance could help U.K. units of companies such as General Motors, Ford Motor Co., PSA Peugeot Citroen SA and Bayerische Motoren Werke AG.

``The government is very much aware of the problems faced by carmakers,'' the U.K. business department said today in a statement. Business Secretary Peter Mandelson is planning to meet industry representatives soon, the department said.

Opel Talks

German Chancellor Angela Merkel is holding talks this afternoon with General Motors' Opel division about providing support. French Finance Minister Christine Lagarde called today for national and European ``actions'' to support the industry. U.S. automakers may receive $25 billion in loans and European automakers are lobbying the European Union for 40 billion euros ($50.6 billion) in assistance.

Automakers in Germany, the European Union's largest market, have lowered 2008 sales forecasts. The country's auto manufacturers association, VDA, predicts deliveries of 3.1 million vehicles at the most, a 1.6 percent decline from last year and below the previous forecast of 3.2 million.

-- With reporting by Robert Hutton in London. Editors: David Risser, Evan Roth.

To contact the reporter on this story: Sabine Pirone in London at spirone@bloomberg.net

Last Updated: November 17, 2008 06:54 EST

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