Ministers are set to invest up to £1bn of public money into Britain's rejuvenated car industry, with aims to turn it into Europe's second biggest vehicle maker.
According to The Sunday Times, senior automotive executives have been pushing for a financial commitment from the government to the tune of £1bn, which will be matched by industry.
In a deal similar to the one revealed by the aerospace sector, it is understood the scheme will be unveiled alongside the government’s automotive strategy at next month’s Goodwood Festival of Speed.
The move represents a further boost to an industry which has seen its car output rise 15% over the past two years, compared to a 3% fall in Germany and 13% in France.
Mike Baunton, interim chief executive of the Society of Motor Manufacturers and Traders, said: “The chancellor has a unique opportunity to drive growth in a strategic sector for the UK economy, so it is vital that the forthcoming spending round supports our industry’s growth potential through investment, innovation, low-carbon vehicles and skills.”
Last year the British automotive industry accounted for £55bn of turnover and made up 10% of the UK’s exports.
It employs 700,000 and has seen the likes of Jaguar Land Rover recently reporting record £1.7bn annual profits.
Japanese car maker Nissan, which owns a plant in Sunderland, also revealed recently that it is operating close to full capacity.