20 September,2009 10:28 AM IST | | PTI
India's Tata Motors has been sanctioned a 10 million pounds loan for its new electric car project in the UK by the British government.
With this, Tata has become the first company to secure a loan under the British government's 2.3 billion pounds Automotive Assistance Programme scheme, eight months after its launch. The loan from the government will support 25 million pounds of the Indian company's own investment in plans to develop and manufacture Tata-branded electric cars in the UK.
The company is now considering locations in Britain to set up a factory. An announcement is expected soon. Britain's Business Secretary, Lord Peter Mandelson, said: "The government is determined to help the car industry to exploit fully the opportunities offered by green manufacturing. Today we are backing Tata as Tata backs Britain.
"This loan will strengthen our electric vehicle manufacturing expertise, securing and creating high-value engineering jobs in the West Midlands."
A spokeswoman for the Business Secretary said the government is in talks with 17 other companies about projects worth two billion pounds.
Tata said: "It appreciates the state support." The car maker, led by Ratan Tata, has developed a four-seater electric vehicle in partnership with Norwegian group20Miljo Grenland/Innovation. Production of the vehicle should begin in Norway later this year, The Daily Telegraph reported.
The Automotive Assistance Programme is part of the government's support for the beleaguered car industry alongside the scrappage scheme, which offers consumers 2,000 pounds incentive to scrap an old car for a new model and has reinvigorated sales in the UK.
The Society of Motor Manufacturers and Traders have written to Lord Mandelson to ask for the scheme to be extended to the original end date of February 2010. Lord Peter Mandelson, the Business Secretary, had unveiled the scheme in January.
