ACEA, the European Automobile Manufacturer’s Association, has asked the European Union for a £31 billion loan to invest in low-emission technology.

The request follows comments made by car manufacturers at the Paris Motor Show last week in reaction to US carmakers getting a £14bn loan approved by the US congress.

The European Commission has declined to comment on the proposal. However, an official for the EC said the EU was “not a bank”.

ACEA said: “Carmakers face increasingly hesitant consumers and call on governments to respond, stimulate the economy, relieve the credit crunch and resotre consumer confidence.”