Paris - As French President Nicolas Sarkozy prepared to meet with representatives from the country's auto industry later on Monday, the head of Renault, Carlos Ghosn, said emergency government loans were necessary for the sector to survive the economic crisis.

"What we are demanding from the state is some reasonable financing, over 2 to 3 years, at interest rates between 4 and 5 per cent," Ghosn said in an interview published Monday in the daily Le Figaro.

The car industry is very "credit-intensive," Ghosn said, with two of every three cars purchased on credit. "If the finance crisis continues, you will see one producer after the other fail," he warned.

The French auto industry was already aided in the 26-billion-euro (35-billion-dollar) economic stimulus package announced by Sarkozy on December 4, but Ghosn said this was not sufficient.

"It is very well to stimulate the market by paying 1,000 euros to those who give up their old cars," Ghosn said. "But the banks must also be encouraged to lend. ... This crisis is above all financial."

Both Renault and the other large French carmaker, PSA Peugeot Citroen, have shut some of their factories to cut production as demand for cars in Europe has plunged.

The car makers are expected to ask Sarkozy to provide aid to their suppliers as well.

"The entire system is threatened," Ghosn said. "I can not function if my suppliers disappear."

In November, the registration of new private cars in France fell by more than 14 per cent year-on-year, confirming the onset of a severe crisis in the sector. But, according to Ghosn, the worst of the crisis still lies ahead.

"We haven't touched bottom yet," he said. (dpa)