The Society of Motor Manufacturers and Traders (SMMT) has backed the findings of a Business and Enterprise Select Committee inquiry that expresses ‘serious concern' about the effectiveness of the Automotive Assistance Programme (AAP).

The programme announced in January 2009 set out £2.3bn in loans and loan guarantees for the motor industry, yet to date no companies have benefited from the scheme.

SMMT has called for greater flexibility in AAP eligibility to ensure quicker delivery of credit to companies throughout the automotive sector.

In giving evidence to the inquiry on the AAP, SMMT identified the following key issues:

• Banks remain reluctant to lend to the automotive sector

• The majority of companies need access to working capital above project finance

• The removal of trade credit insurance has further undermined the banks' attitude to risk in the automotive sector