The Chancellor has been told that he must help the UK's troubled car industry in next month's budget.
Alistair Darling has been sent a letter from the Society of Motor Manufacturers and Traders (SMMT) calling for state aid to help reduce further job losses and cuts in production at many car makers.
The SMMT has implored the Government to announce a scrappage scheme, under which motorists could receive up to 2000 towards a new car if they scrapped their older vehicle.
SMMT chief executive Paul Everitt said: 'The Government has an opportunity to support UK manufacturing as a key global player in the low carbon future, but immediate action is needed to protect the country's industrial capability.
Government must use the Budget to boost consumer confidence and kick start the market with a scrappage incentive scheme to encourage private sales and tax changes to generate business sales.'
The number of new cars sold in recent months has dropped by up to 70% and the number of cars built in the UK this year is expected to be fall by 700,000, compared with 2008.