Edinburgh, Scotland, 30-6-2014 — /EuropaWire/ — RBS today launches £25m of funding specifically aimed at suppliers in the automotive industry. RBS is the first bank to offer bespoke Tooling Finance and has done so in response to the urgent need for funding assistance which has been raised by the UK Automotive Council.
Tooling is the manufacture of tools required for the production of vehicle components and the cost of tooling can range from £30,000 to in excess of £1million. It is estimated that UK-based car manufacturers currently have a requirement for tooling from suppliers to the tune of £500m. With UK vehicle production expected to increase from 1.5m to 2.2m units by 2016, the automotive industry has already been identified as extremely important to the UK and it’s exporting ambitions. Not only that, but around 2,350 UK companies regard themselves as ‘automotive’ suppliers, employing around 82,000 people.
Business Minister Michael Fallon said:
“This new funding for Tooling Finance reflects the growing confidence and increased understanding financial institutions have towards the automotive sector – thanks to our work through the joint government and industry Automotive Council. Coming hard on the heels of a new Government scheme I announced this month there is now almost £50 million available for auto supply chain companies to finance new tooling.
“I want this fund to be the catalyst for other banks to increase credit to viable businesses in our vibrant automotive sector as it continues to drive the UK’s economic recovery.”
David Keene owns RDM Group, a tier 1 supplier based in Coventry and he also sits on the Automotive Council. RDM has supplied products and services to the Automotive industry since 1993 and it manufactures a wide range of products on a bespoke basis, David is therefore all too aware of the issues around tooling funding and the importance of it within the supply chain. He commented:
“Tooling Finance is becoming ever more vital in the automotive industry and is essential if we are to grow the UK supply chain. RBS is the first bank to launch this specific funding and has spent a considerable amount of time understanding the needs of the vehicle OEM’s and the wider supply chain. RBS Tooling Finance is a ‘game changer’ for the supply chain and will be of immediate interest to RDM and many other companies like us. I look forward to seeing this initiative improving the capability of the UK supply base with a bank that clearly understands this important sector and its requirements.”
Alison Rose, Chief Executive of RBS and NatWest Commercial and Private Banking, said:
“RBS’ commitment to support the UK’s economic recovery is unequivocal. Through the delivery of this Tooling Finance, we hope to not only safeguard but create jobs, and relieve a stressed supply chain within the UK automotive sector – a key sector for Britain’s manufacturing industry.”