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Subcontractors and part suppliers to Volvo cars denied bank loans

Sunday, 16 December 2012
Several major suppliers  and subcontractors to Volvo Cars corporation have been denied loans aimed at helping them develop future car models. The trade association FKG is now warning that the entire industry is in flux and requires that the government intervene.

Speaking to Swedish television,  Fredrik Sidahl, President of FKG representing subcontractors in the automatic sector said "they are seriously not being able to participate and develop future models together with some customers just because one  cannot not get credit that was normal in the old days."

In early December, Volvo Cars presented its very aggressive growth plan for the Sweden market. The plan takes a shape of new structures being erected.
In Gothenburg there is a completely new body plant being built. There is a whole new generation of cars and engines to be developed - an investment of Skr35 billion. In addition, Volvo has put a lot of large orders with its suppliers but the banks look at the  industry and feel that it is in crisis.

Evidence of this is the halt in several cases in which banks don't want to invest in their operation because they have interpreted the market as that the sector is in crisis. But this is a similar situation seen in Europe which the governments there have come in and is providing assistance to those industries.

"Soon it will be too late for Sweden. In Europe, the industry is already in supports of the states. In England, there is a very powerful program for industrial vehicle manufacturers. Germany also has a great program for their industry with their research," says Fredrik Sidahl.

The Swedish contractors want quick action to be taken otherwise, they believe that there is a risk that many large companies would be forced to give up. This is serious for Sweden, for it is one of the European countries that is most dependent on its automotive industry.
By Team

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