A shortage of available finance is limiting the expansion of firms in the automotive supply chain.

This is according to new research conducted by the Smith Institute on behalf of the Society of Motor Manufacturers and Traders (SMMT), which found a lack of understanding of the sector from banks is contributing to an unwillingness to lend.

Chief executive of SMMT Paul Everitt said: "Vital opportunities for companies to grow and develop their businesses are being hampered because banks have not responded quickly enough to the need for local knowledge and sector expertise."

He added the UK currently has a "unique opportunity" to rebuild its auto manufacturing capabilities, but this cannot happen without support from the government, the automotive industry and financiers.

However, despite the difficulties many companies may be having obtaining finance, vehicle production in the UK is still likely to hit a record level by 2015, when more than two million cars are expected to be built, SMMT research has stated.

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Posted by Sarah Godfrey