The crisis engulfing the West Midland car-making industry deepened as clutch manufacturer AP Driveline went into administration and vanmaker LDV said it was delaying paying bills.

The future of hundreds of companies seems to hang on an announcement expected from the government on Wednesday about a multi-billion scheme to restore credit to manufacturers and suppliers whose banks have cut off borrowing.

A question mark hangs over more than 200 jobs at Leamington-based AP Driveline after the company went into administration following a slump in work.

Russian-owned LDV told suppliers it was delaying payments to suppliers to help overcome a cash flow problem caused by the credit crunch and a downturn in van markets.

Production of the award-winning Maxus light commercial vehicles has been suspended until at least the end of January but manufacturing staff are being paid.

“This is an industry-wide issue and we are managing cash as tightly as we can and delaying some payments to suppliers in line with other manufacturers,” an LDV spokesman said.

The company, part of Russian oligarch Oleg Deripaska’s Gaz group of commercial vehicle manufacturers, had been expected to see heavy investment at its Washwood Heath factory in Birmingham and its products.

Instead it has seen UK demand for its vehicles in the sub-3.5 tonne class slump 61 per cent in December and 43 per cent in 2008.

Mr Deripaska, who acquired LDV via his Gaz operations in 2006 six months after the company was bought out of administration by an American private finance group following a financial collapse in the winter of 2005, is facing cash problems.

It was reported in October he needed a $4.5billion bail-out from the Russian government to repay loans to foreign banks.

At AP Driveline, joint administrator David Bennett of PricewaterhouseCoopers, said the company suffered a “substantial fall” in work volumes over a short period of time.

“Our priority is to review all options for the company and seek a buyer. Whilst a buyer is sought, we expect to continue trading,” he said.

The latest bleak news from the sector came after Nissan cut 1,200 jobs – almost a quarter of the workforce – at its plant in Sunderland last week.

Mr Bennett added: “AP Driveline has suffered as a result of the economic challenges facing the automotive industry.”

According to figures from the Society of Motor Manufacturers and Traders (SMMT), a 21.2 per cent fall in new car sales in December dragged 2008 sales 11.3 per cent below the previous year.