Brussels - The European Investment Bank (EIB) on Thursday formally approved soft loans totalling 3 billion euros (3.84 billion dollars) to Europe's troubled car making industry.

This is the second instalment in a series of loans that are expected to total more than 7 billion euros by June, EIB officials said in a statement.

The money approved on Thursday will benefit a number of carmakers, including BMW, Daimler, Fiat, PSA Peugeot-Citroen, Renault, Volvo Cars, Scania and Volvo Trucks.

It is to be used to fund the companies' research and development into developing cleaner and more fuel-efficient vehicles, the EU's long-term lending bank said.

"We are aiming to respond to Europe's needs as rapidly and efficiently as possible, while continuing to ensure that the projects we fund are economically and environmentally sound and in line with European Union priorities," said EIB President Philippe Maystadt.

The approval of the loans comes as EU car manufacturers are being devastated by the economic crisis, with car sales plummeting and dire warnings of bankruptcy and mass job losses in an industry which provides some 12 million jobs across Europe.

According to industry umbrella group ACEA, vehicle production slumped 28 per cent in the last quarter of 2008, and is expected to fall a further 15 per cent this year.

Guenter Verheugen, the EU's industry commissioner, and EU ministers are due to hold informal talks in Brussels on Friday with officials from General Motors Europe in a bid to prevent the company from going bankrupt.

GM's Swedish subsidiary, Saab, said Thursday it planned to shed 750 employees from its workforce of about 4,000 in Sweden.

Meanwhile, GM's German subsidiary, Opel, is planning to close one of its four factories in Germany and make 5,110 production workers redundant as part of efforts to save the company. (dpa)