The EU's industry commissioner has warned the outlook for the European car industry was "brutal".

Guenter Verheugen has ruled out relaxing state aid rules to help member governments bail out their domestic carmakers.

"There is no guarantee that all the main European manufacturers can survive the crisis," he said.

Current rules allow governments to provide assistance if the money was used for investment and restructuring, rather than just keeping a company afloat.

Distort competition

"Any races to subsidies should be avoided because it would distort competition and the functioning of the internal market," Verheugen added.

He did not, however, rule out increasing loans to carmakers from the European Investment Bank.