Jaguar Land Rover will meet with banks to explain which components are key for its expansion plans, in order to secure better loans for suppliers, according to The Daily Telegraph.
In a report in the Telegraph Monday, the carmaker will identify the car parts it expects to purchase to satisfy its expansion plans, to show banks that suppliers have long term contracts and will be able to repay loans from the increased sales.
Operations director Alan Volkaerts is due to brief a group of Midlands-based bankers within two weeks about JLR’s plans for expansion at its plant in Solihull and Wolverhampton, where a £400m engine plant is to be constructed.
More visibility of the component parts and the need for reliable supply is expected to persuade banks that the companies in JLR’s supply chain represent a lower risk, reducing loan terms.
The briefing is understood to have been organised by a corporate finance company emlisted by the Birmingham Local Enterprise Partnership to improve finance for Midlands automotive suppliers.
JLR has issued more than £2bn-worth of supply contracts to more than 40 companies in the UK, mainly for production of the Range Rover Evoque. Under chief executive Ralf Speth and Tata chairman Ratan Tata, JLR is investing £1.5bn a year in new products and to drive production at its three Midland plants to 500,000 vehicles a year.
The Telegraph also revealed that the corporate finance business operated by JLR’s owners Tata Sons, called Tata Capital, is assessing whether to build a presence in the UK market. The corporate finance vehicle may focus on lending to advanced manufacturing companies.
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