The French government is offering ailing French car manufacturer PSA Peugeot Citroen up to 7 billion euros (£5.6 billion) in monetary pledges, according to the car maker.
The car maker said the government bailout of Banque PSA Finance, which is the car loan arm of the manufacturer, will be in the form of new bonds to increase cash.
In the quarter ending in September, vehicle sales dropped 3.9% to 12.93 billion euros (£10.5 billion), compared with the 13.45 billion euros (£10.9 billion) recorded in the same quarter in 2011.
Tepid consumer demand in Europe has particularly hit vehicle sales, which have fallen 8.5%.
Peugeot Citroen has plans to shut one manufacturing plant before year's end, meaning thousands of employee layoffs. What is expected, however, is that the Socialist government will require the company to reduce the numbers of layoffs in return for the bailout.
Peugeot Citroen also reported new advances in its relationship with General Motors. Together Peugeot and General Motors are working on a project to build a compact van for GM's Opel and Vauxhall brands. The joint van will be the model for a future Peugeot compact crossover vehicle.
The two companies will also work together to design a new clean-emission compact car as well as medium-sized cars and compact vans for both brands.
Earlier this year GM took a 7% stake in Peugeot Citroen in a joint deal, which the companies say will result in an annual savings of 2 billion US dollars (£1.25 billion) by 2017 thanks to combined purchasing.
In related news earlier in October, Peugeot took the prize as the City Car Manufacturer of the Year at the GreenFleet Awards held in London's Emirates Stadium.
The awards are given in recognition of efforts made to reduce the environmental impact of transport. Private and public sector fleet managers, vehicle manufacturers, suppliers and other organisations are all recognised for their pioneering environmental work.
Peugeot beat out the tough competition from Fiat, Mini and Volkswagen to win the award as City Car Manufacturer of the Year. It was 'commended' in the Fleet Car Manufacturer of the Year category, which saw competition from BMW, Mercedes-Benz and Volvo.
Colin Boyton, marketing manager for GreenFleet, said: "Peugeot has had an impressive year in 2012, with the introduction of some cracking new models, and none more so than the new 208. With every diesel model coming in at sub 99g/km, and even as low as 87g/km, it was a natural choice for the judges. Having used the model ourselves in the Fuel Efficient Driving Experience at the recent GreenFleet Scotland event, we know first-hand the kind of impressive MPG figures that are achievable too."
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