Senior opposition figure Penny Wong claims some coalition government ministers are championing the closure of Holden.
"But they're not brave enough to put their names to it," she told Sky News on Tuesday amid reports that Industry Minister Ian Macfarlane is the only cabinet minister backing more government assistance for the car maker.
Senator Wong's comments came as GM Holden boss Mike Devereux told a Productivity Commission inquiry no decision had been made about the car maker's future in Australia.
Liberal senator Simon Birmingham welcomed the statement while rejecting Senator Wong's claims.
"Nobody in the government wants to see Holden close," he told Sky News.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
Independent senator Nick Xenophon says Tony Abbott will not want to go down in history as the prime minister who presided over the death of Australia's automotive industry.
"If you lose Holden, you end up having a collapse in the entire automotive supply chain," he told reporters in Canberra.
Australian Greens leader Christine Milne says her party is very concerned about the potential of "horrendous" job losses, the loss of skills and manufacturing capacity.
Labor frontbencher Doug Cameron said the government didn't seem to care about Australia's manufacturing sector.
"Unless we have a manufacturing base in this country, we will end up being a quarry, a farm and a tourist destination and that is not good enough," he told reporters.
Opposition assistant treasurer Andrew Leigh argued Australians wanted cars made locally despite figures showing taxpayers were covering about $2500 of the cost of each vehicle.
Australia was one of only a dozen or so countries able to manufacture a car from start to finish, he said.
Subsidies to the car-making sector have averaged about $550 million a year for the past six years, the Productivity Commission estimates.
Australian Greens MP Adam Bandt warned of a possible recession if thousands of Holden jobs were lost and the government pressed ahead with its cuts to the public service.
Parliamentary secretary Steve Ciobo dismissed the suggestion as "a very long bow to draw", saying it wasn't inevitable that Holden would go to the wall.
The car sector was facing strong headwinds, but the government was doing all it could to ensure its viability with $1 billion in funding in 2015 and a further billion beyond that.
"We would welcome Holden clarifying their intent about what they'd like to see happen and where they believe the future of manufacturing is in Australia," Mr Ciobo told reporters.
