EUROPEAN CAR makers yesterday became the latest industry grouping to ask for support as they said they would approach the European Commission about a €40 billion loan to develop environmentally friendly products in response to a move by the US.

Sergio Marchionne, Fiat chief executive and former president of the European car makers' association (Acea), told the Financial Timesyesterday there was unanimous agreement among manufacturers on the package.

The US Congress last weekend approved a $25 billion (€18.15 billion) low-cost programme, mainly aimed at the big three Detroit manufacturers, to develop green vehicles and engines. "We will approach the European Commission for a similar idea to the US; €40 billion is a good number given the bigger size of the European industry. We need a level playing field," Mr Marchionne said.

The US loan has caused concern among German car makers such as Volkswagen, which think it could discriminate against foreign manufacturers in the US.

Although the details need to be decided, at present the US loan would apply to factories older than 20 years - ruling out most foreign-owned plants. Stefan Jacoby, head of VW in the US, said the German car maker was lobbying US authorities.

Other European car makers - led by France's Renault and Italy's Fiat - favour approaching the European Commission directly.

Car makers are worried it will be impossible to hit targets for carbon dioxide emissions, which Brussels is planning, because of the current economic difficulties.

"We are on our knees at the moment, so if they want us to invest billions of euro, the Commission has to help us out," one European car executive said.

- (Financial Times service)