Jaguar cars at Halewood

JLR joined fellow UK motor manufacturers late last year in a joint approach for government aid: “We have been saying they have to do things to stimulate demand. They have done some things but there is a whole series of tax and other incentive actions they could take.

“We, our suppliers and our dealers are all suffering from cash problems, essentially because the banks aren’t lending properly to the sector.

“So, we have said either we need to find ways to free up commercial lending or the state may have to put loan guarantees in place to allow some of that lending to flow.”

But, while other foreign governments have pledged funding for their car industries, the UK has yet to come out with a support package, which Mr Smith said could hamper the UK’s competitiveness.

“While we are not asking for a bail-out, we do need access to these credit facilities, otherwise we will be disadvantaged versus some of our competitors.”

He said Indian owner Tata had provided hundreds of millions of pounds of investment since its £1.15bn purchase of JLR last June, but even the international conglomerate is a victim of the credit crunch.

“What they, and we, have a problem with is the inability to access the credit markets. Really, that is all that we have asked the Government for: either help us to get the commercial funds flowing or provide loan guarantees so we can make that happen directly.”

He added that JLR had also asked for consumer credit companies – along with component suppliers and dealers – to be included in any package in order to help its potential customers to raise the money they need to buy its cars.

“Again, that is something we have seen in other countries, but which the UK Government hasn’t so far done.”