Sydney - Carmakers need a government subsidy to roll out the vehicles that Australians want to buy, an industry lobby group said Sunday.

The three local carmakers - Toyota Motor Corp, GM Holden Ltd and the Ford Motor Co - only make big, petrol-thirsty cars that have lost their appeal because of higher petrol prices and environmental concerns. Smaller cars, all of them imports, are what the customer wants.

Federal Chamber of Automotive Industry spokesman Andrew McKellar said the government should help pay for the shift to more fuel-efficient vehicles as part of its response to the challenge of climate change.

"We have to ensure those new technologies that will support achieving these objectives that they are coming into the marketplace, they are being taken up in terms of new vehicles being manufactured in Australia as well as being made available more broadly across the market," he said.

The government has already promised 500 million Australian dollars (450 million US dollars) in subsidies for the production of what it has called a "green car." Toyota, which plans to produce a hybrid version of its Camry, is the first beneficiary.

Last week the government issued a discussion paper canvassing ideas for reducing carbon emissions from vehicles. The ideas include obliging manufacturers to include petrol-consumption figures in advertisements.

But Environment Minister Peter Garrett stressed that the government was not about to take any action that might hurt sales of four-wheel-drives and other vehicles heavy on fuel.

"There is no silver bullet for reducing CO2 emissions from the transport sector," Garrett said in a statement, "instead, we need a structured and measured approach to this issue."

He said that "reforms to address fuel efficiency will need to be complementary to the scheme to help reduce travel costs and carbon emissions for Australian motorists." (dpa)