Berlin - The German car market is facing its worse downturn, the nation's auto industry association warned Wednesday as the deepening sense of economic gloom in the country leads to a shakeout in the industry and the prospects of big job cuts.

The German Automotive Industry Association (VDA) said it expects car sales in Europe's biggest auto market to slide to 2.9 million next year, down from a forecast 3.1 million in 2008.

The downturn in the German car industry is "at a pace and dimension that has never happened before", said VDA chief Matthias Wissman releasing the latest data.

With car buyers keeping away from showrooms and auto makers cutting production, Wissman said the big slump in sales is likely to lead to lay offs in the industry.

"The crisis will also have an impact on employment," he said without detailing how many jobs he expects will be lost as a result of the crisis triggered by a meltdown in the US mortgage market and the consequent global credit crunch.

"But the longer and deeper the crisis is then the greater the effects will be," said Wissman.

The VDA estimates that about one in eight jobs in Germany is linked to the automobile industry, which is one of the nation's key exporters. About 750,000 people were employed in the car sector in 2007.

The fiercely competitive car industry has been battling in recent years to boost sales with the financial crisis coming in the wake of the recent surge in oil prices and a hefty hike in German sales tax.

The release of the grim forecasts for the German car marker coincides with attempts by the big three American carmakers - General Motors, Ford and Chrysler - to convince the US Congress that they need a total of 34 billion dollars if they are to survive the current upheaval in the global car industry.

In the meantime, the Swedish government has said it would consider offering aid to Ford's Volvo offshoot and GM's Saab operations. dpa