PARIS, FRANCE - France and Germany are determined to help their car industry weather the economic storm, President Nicolas Sarkozy said Monday following talks with Chancellor Angela Merkel.

"We will not let down our automobile industry, this is a permanent fixture for Europe," Sarkozy said at a joint news conference at the Elysee presidential palace.

"I understand that in Germany, there is precisely this same willingness." Sarkozy reiterated his concern that a 25-billion-dollar (20-billion-euro) plan for the Big Three US automakers ? Chrysler, General Motors and Ford ? will leave European car manufacturers at a disadvantage.

"We can't have the Americans unlocking 25 billion dollars in loans for their three manufacturers while we would be caught up in a state assistance regime that does not allow us to help our European automakers," he said.

France, which currently holds the presidency of the European Union, is pushing for tax cuts and other "targeted measures," Sarkozy said.

European automakers in October said they would need 40 billion euros in soft loans and other incentives to help them face plunging demand and re-tool factories to build more energy-efficient models.

Les Echos financial daily said the French government was looking into a plan to support its car industry as part of its 20-billion-euro strategic investment fund.

"What do we want, Madame Merkel and I? To keep our industries in Europe (...) that's what we want: to defend European industry," the French president said.

"We don't want to defend it by raising protectionist barriers. We are in favour of free trade, but we want to defend the industry by helping it innovate, through research and technology."

France's two main automakers, Renault and PSA Peugeot Citroen, have been forced to slash thousands of jobs and temporarily halt production at several plants in response to plunging demand.

New car sales in Europe slumped 14.5 percent in October, according to the European automakers association ACEA.

Sarkozy in October unveiled a 400-million-euro package to help the French car industry build more green cars over the next four years.

France's motor sector employs, directly or indirectly, 10 percent of the country's workforce, and companies have shut down several plants temporarily and sent workers home.