The Government is expected to give funds and financial assurances to General Motors that could see Britain become its centre for electric car production in Europe, creating thousands of new jobs and hundreds of millions of pounds of investment.
Nick Reilly, chief of the company's Vauxhall Opel division, will meet Business Secretary Vince Cable in an effort to secure £30 million of funding to start production of the Ampera long-range electric car at Ellesmere Port, Cheshire, within the next four years.
Though the previous government is understood to have offered £275 million in loan guarantees on condition that the 170mpg Ampera was built in the North-West, Vauxhall is now seeking only a small proportion of that to kick-start the massive project.
And Financial Mail understands that at the crunch meeting within the next two weeks, Reilly is likely to be given the assurances he is seeking to bring the Ampera to Britain, rather than building it in Spain or Germany.
The funding is expected to go ahead despite the huge cuts being imposed across all Whitehall departments.
The Government will also emphasise to Reilly that it remains committed to helping bring electric cars to Britain by boosting the infrastructure and helping to fund thousands of charging points across the country. It will also stick to the commitment to provide up to £5,000 per vehicle to help subsidise the production of all electric cars.
The Government believes it is vital to bring down the level of greenhouse gases by limiting emissions from cars. It has already given Nissan £20 million to help the Japanese car maker bring the Leaf electric car to its factory in Sunderland and could be accused of acting unfairly if it did not make a similar offer to Vauxhall.
Reilly, who used to head Vauxhall, believes that Ellesmere Port 'ticks most of the boxes' as a site to make the Ampera. Industrial relations and productivity at the vast factory are excellent.
If the Ampera was to be brought to Ellesmere Port the company would have to put in another production line and recruit a further 2,000 workers to meet demand for the £25,000 car.
Meanwhile, one in eight Britons plan to bring forward their car purchase to avoid the Chancellor's VAT tax increase, signalling an upbeat picture for the British car industry, according to a new survey.
Research among 2,000 people by GfK NOP market research in the wake of the Budget reveals that the 2.5 percentage point increase in VAT in January will drive people to the forecourts earlier, particularly middle- to high-income owners.
The rise in insurance tax is making a quarter of car owners consider scaling down to smaller vehicles.
source: dailymail
