TNAG-0955-FCO40-1174-Legislation-for-traffic-on-roads-in-Hong-Kong-1980 — Page 57

Enter 80

Department of Industry Ashdown House

123 Victoria Street -

London SW1E 6RB

Telephone Direct Line 01-212

Switchboard 01-212 7676

E A Whitear Esq HM Treasury Parliament Street London

SWIP 3AG

AKK 172/1

RECEIVED IN REGISTRY NO. 51 10 OCT 1980

DESK OFFICER

INDEX

PA

REGISTRY Action Taken

No MS10.10

Aw 1011

8th October 1980

41

Dear Whitear

I attended the meeting with Ken Cotterill yesterday to discuss ECGD's buyer credit to KMB and have seen Mr Birch's subsequent letter to you.

We strongly support the proposal to provide additional buyer credit for the financing of a further 356 buses, valued at £18M, under Section 2. The UK bus industry is entering a particularly difficult period in the home market as the progressive removal of the New Bus Grant and reductions in the levels of Local Authority expenditure will substantially depress demand. In these circumstances export markets are certain to assume a greater degree of importance to the industry than before. Hong Kong is a key export market where, because of that Government!s "Buy from the Commonwealth" condition, UK manufacturers have predominated and the proposed additional finance will help to preserve this position which UK companies are geared to maintain.

We are aware of strong foreign interest in the Hong Kong market and, in particular, MAN of West Germany is ready to provide KMB's requirements should the UK with- draw, since they need additional outlets quickly to sustain current production economies of scale. In the not too distant future the Japanese are also likely to pose a threat with the added advantage of their proximity to the market, and they are already well advanced in the development of possible alternatives.

We therefore join with ECGD in the hope that you will be prepared to authorise the proposed support.

I am copying this letter to recipients of that from Birch.

Jours sincerely

J E Cammell

هه