JLR talks are not over yet, say officials

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The Independent Online

The Government has denied that the terms of loan guarantees offered to Jaguar Land Rover represent a best and final offer.

Sources close to negotiations claim that the Department for Business (Berr) has issued a "take it or leave it" set of conditions in response to the luxury car marque's request for loan guarantees worth more than £750m. Provisos include a reduction of the amount to be guaranteed by the taxpayer, and a government-nominated seat on the board.

But the Government maintains that discussions are ongoing and there has been no final offer. "The Government is talking to JLR about what it needs both long and short term in terms of what shape the business needs to be and how to get there," a spokeswoman for Berr said.

Yesterday also saw the publication of another set of woeful sales figures for the car industry. In the 11th consecutive month of falling sales, some 24 per cent fewer cars hit the streets last month than in April 2008, equivalent to more than 42,000 vehicles, according to the Society of Motor Manufacturers and Traders (SMMT). Over 2009 so far, more than 254,000 fewer cars – or 28.5 per cent – have been sold.

The beleaguered car makers are hoping that the scrappage incentive due to come into effect on the 18th will boost the market. The scheme outlined by the Chancellor in last month's Budget offers drivers of cars more than 10 years old a £2,000 discount to buy a new model.

Paul Everitt, the chief executive of the SMMT, said: "Despite the tough conditions, industry is hopeful that its prospects will improve in the coming months and the steps it has taken will provide the basis for a sustained recovery once growth returns. The UK motor industry remains of strategic importance and will play a key part in generating jobs and prosperity into the future."

The scheme has had a mixed response from the industry. Manufacturers have reported huge interest in the scheme since it was announced. But sceptics say that the structure of the plan, which involves £1,000 from the Government and the other half from the manufacturer itself, may undermine its effectiveness as car companies substitute existing or planned discount schemes.