RBS praised for supporting the automotive industry

RBS praised for supporting the automotive industry

The Government and Automotive Council have recognised the efforts made by RBS to improve access to funding for the UK car and motorcycle industry in a new strategy report.

Highlighting the role played by RBS in supporting the automotive industry

The report, Driving Success - a strategy for growth and sustainability in the UK automotive industry (PDF 4.2MB), highlights the role played by RBS in developing better understanding between the banking and automotive industries to facilitate easier access to finance.

The strategy report, launched by Business Secretary Vince Cable and Professor Richard Parry-Jones, co-chairs of the Automotive Council, says that access to affordable, diverse and appropriate sources of finance is a “fundamental enabler for the automotive supply industry to capitalise on automotive vehicle/engine maker growth in the UK.

But it adds that the automotive industry has historically been seen as a high risk sector by the banking industry.

“The automotive industry’s supply chain environment is complex, preventing specific needs being fully understood (particularly on financing of tooling),” it says. “The recent financial crisis and subsequent contraction of the banking sector has meant that access to finance for companies, particularly for smaller companies in the lower tiers of the supply chain, has been challenging.”

Joint industry forum

The Automotive Council and the British Bankers Association, in conjunction with the leading banks have created a joint industry forum to improve dialogue and have made “considerable progress” on tooling finance and a framework agreement to enable commercial discussions between vehicle/engine makers, suppliers and the banks. 

The report says: “The Royal Bank of Scotland (RBS) has taken a leading role in enabling this to happen and have led by example by investing in automotive sector expertise. Reflecting this leadership, RBS were invited to represent the banks on the Automotive Council.”

One of the experts recruited by RBS is Richard Hill, who joined RBS Corporate Bank in 2008, following 20 years in the automotive sector working for BMW, Rover Group and Manheim Group. 

Dedicated auto team

Hill, Head of Automotive Sector for RBS, said: “The automotive strategy highlights the lead that RBS has taken to support the auto sector and address the funding challenges within the supply chain. 

"To support the growth of this vital sector RBS has invested in building a dedicated auto team with excellent understanding of the industry and which is developing bespoke funding facilities to meet the needs of each car manufacturer’s supply chain structure. 

"As a key representative on the UK Automotive Council, we have played a pivotal role in establishing a joint banking and automotive industry forum through the British Bankers’ Association.”

The Automotive Council will also work with the financial services industry to develop long-term investment finance products that meet the needs of the automotive industry, including non-bank solutions. In addition, the banks are targeting their professional mentoring services towards automotive SMEs in development of their business plans.

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