Industry body, the Australian Motor Industry Federation has warned that the country's automotive industry is facing a perfect storm as every sector of the industry is facing difficult business environment due to changes in the economy.

Richard Dudley, the chief executive officer of the Australian Motor Industry Federation said at the National Press Club that the every sector of the industry is being affected. He warned that 450 businesses in the sector including car retailing, service and maintenance sectors are closing down and also said that the number is rising.

"2700 people left car and car component manufacturing in 2011-12, but more than 13,000 people left the automotive service and repair sectors over the same period. For too long, successive governments have failed to recognise that the domestic automotive industry does not begin and end with vehicle and component manufacturing," Dudley said.

Coalition industry spokeswoman Sophie Mirabella said that if the Tony Abbott wins the federal election, the new government would ensure the survival of the car industry. The Gillard government's assistance scheme includes a $1.5 billion will be paid out between 2011 and 2015, and a further $1 billion over the following five years.

The remarks came after Ford said that it would close down its Australian operations and Holden made a similar indication.