Carmakers are to ask for access to a £65 million training fund to save jobs as they face plummeting sales next year.
Automotive industry leaders believe they are experiencing their worst crisis for 25 years, with November’s production figures, to be published tomorrow , expected to show a sharp fall.
But there was still no sign of agreement on requests for Government support, as manufacturers such as Jaguar Land Rover suffer from the effects of the credit crunch.
The Society of Motor Manufacturers and Traders (SMMT) has written to Alistair Darling, the Chancellor, and Lord Mandelson, the Business Secretary, asking the Government to make loans available as a replacement for credit which banks would usually provide.
It argues this is essential for the future survival of firms such as Jaguar Land Rover, which employes more than 16,000 people in Birmingham, Solihull and Merseyside.
There had been speculation that the Government would announce measures this week, but negotiations are still continuing and an imminent decision looked unlikely.
The Treasury will only make funding available if it is convinced it is needed.
Carmakers also plan to call on the Government to make cash available from a £65 million training programme called Train to Gain.
Firms could use this to improve the skills of workers, potentially moving staff from departments where positions are cut, such as the production line, into specialist roles such as design where there is a shortage of qualified workers.
Although cash is already available to businesses, only a small proportion of the cost of training is subsidised.
The industry will argue that vehicle manufacturing supports 800,000 jobs and is vital to other major industries such as steel, plastics and chemicals.
Birmingham MP Richard Burden (Lab Northfield), Chair of the Parliamentary All Party Motor Group, has been urging Ministers to make more support available, both in the House of Commons and in private meetings.
He said: “Every industry and every business is important, but I believe the automotive industry has particular strategic importance, It is responsible for turnover of £13 billion in the West Midlands.
“There’s been a temptation, not just in Britain, to focus on other sectors such as the finance industry, rather than manufacturing.
“If the downturn has shown us one thing, it is that we still need the so-called ‘real economy’, the firms that make things.”
Car industry representatives have been in talks with Government Ministers about funding since September, and were hoping for measures to help the industry in last month’s pre-budget report.
But there was disappointment when the key announcement was a 2.5 per cent cut in VAT, which is seen as unlikely to help stimulate sales. Manufacturers such as Nissan are already offering significant discounts which far exceed the effects of the VAT cut, but these have done little to bring customers into showrooms.
Firms are asking the Government to make cash available, either by offering guarantees to banks - giving banks the confidence to lend - or by offering loans directly.
This would be a short-term replacement for credit lines that the banks offer in normal circumstances, and not a “bail-out” to save unprofitable businesses, they say.
The industry also wants the finance arms of automotive businesses, which offer customers credit on new vehicles, to receive the same kind of help as the banks have already obtained, to allow them to keep lending.
As well as well-publicisied meeting with Peter Mandelson on November 27, industry leaders have been in regular contact with the Department for Business, Enterprise and Regulatory Reform.
However, the Treasury and Alistair Darling, the Chancellor, also needs to be convinced that support is needed.
MPs will discuss the future of the automotive industry in a Commons debate on Wednesday.