The Greens say more needs to be done to encourage Australians into smaller more fuel efficient cars.
The party has welcomed the Bracks review of the car industry, released today, but says any subsidy to Australian vehicle manufacturers should be tied to fuel efficiency.
The review urges the government to double its green car innovation fund to $1 billion and establish a $2.5 billion automotive transition scheme that would provide subsidies to car manufacturers.
"I welcome the fact that he (Bracks) realises ... that people want smaller fuel efficiency vehicles and that the Australian industry has to re-tool and make that shift," Greens Senator Christine Milne told reporters.
"It is not helping the global effort for Australia to be trying to sell V8s into the US and into the Gulf States when the world needs to be reducing emissions.
"It's a beginning of the transition because what we need to do is re-build the Australian manufacturing sector."