Jaguar funding raises hopes for Group Lotus
PUBLISHED: 09:23 20 September 2011 | UPDATED: 09:23 20 September 2011
Backers of a bid to secure a £10m loan to kickstart growth at the Group Lotus plant at Hethel are quietly hopeful the proposals could get the green light after the government pledged a similar amount to support the expansion of the Jaguar Rover plant in Wolverhampton.
Yesterday the Indian owners of Jaguar Land Rover (JLR) unveiled plans to create 750 jobs at a new engine plant in the West Midlands
The £335m project, within a new enterprise zone site, is seen as key to supporting the development of high value manufacturing and skills in the UK and will also create more jobs along the supply chain.
But the government is also supporting the project through the ‘Grant for Business Investment’ scheme which is providing up to £10m.
And that has fuelled speculation that a separate £10m loan bid to the government’s regional growth fund (RGF) could also be given the go-ahead when the government makes an announcement later this year.
Welcoming the Jaguar announcement, business secretary Vince Cable, who visited the Lotus plant at Hethel earlier this year, said: “This announcement sends out strong signals to potential inward investors across the world and is a huge vote of confidence in our successful automotive sector in the UK and the skills and expertise in our workforce.
“The government’s support for this project shows we are committed to the ongoing success of UK manufacturing and the UK automotive industry, ensuring the UK remains one of the top destinations for inward investment.”
Group Lotus has submitted a second application to the fund after an original bid seeking more than £30m was rejected earlier this year.
The firm’s Malaysian owners are looking to sink around £200m into a 10 year business plan to transform the company from a specialist niche car firm into a profitable sports car brand, which would include rolling out an automated production line system.
The Hethel Engineering Centre would also be at the heart of the vision, becoming the firm’s centre of applied research.
Yesterday both Group Lotus and the government were remaining tight-lipped about the bid, but last week business minister Mark Prisk joined company chief executive Dany Bahar at the Frankfurt Motor Show to fly the flag for the UK car industry fuelling further speculation that it will get the go-ahead.
South Norfolk MP Richard Bacon said the Jaguar news gave him hope that the Group Lotus bid would succeed.
“It does give me cause for optimism. I know that Vince Cable was very impressed when he visited Hethel,” he said.
“He rightly described it as the ‘best of British’. There is a great deal of upside potential there and it fits in entirely with the government’s aims of growing the non-financial side of the economy.”
The news comes as representatives from high-tech engineering firms from Norfolk and Suffolk will be gathering in Bury St Edmunds for the EAME 11 event aimed at showcasing what firm’s in the two counties have to offer.
Antony Howell, business development director at Active Technology Ltd and joint chairman of the New Anglia Advanced Manufacturing and Engineering Group (NAAME), said: “I think it’s really positive for the UK and for jobs.
“With EAME coming up it’s crucially important that the government supports the Lotus RGF bid because that will not only increase levels of employment within Lotus but also across the New Anglia supply chain.”
A spokesman for the department for business innovation and skills said the Group Lotus application was a different process to the Jaguar funding.
“It’s positive for the motor industry, but this has no bearing on the Lotus RGF bid,” he said. “It’s a separate process.”