Prime Minister Tony Abbott says he wants to give the car industry every chance of success by cutting taxes and red tape, and boosting productivity.
The opposition has called on him to increase government co-investment in the sector to ensure Holden and Toyota continue their operations well into the future.
Meanwhile, Ford Australia will end local car making by October 2016.
The government has initiated a Productivity Commission inquiry to look at how to improve the business environment for the industry and shore up jobs.
Mr Abbott told reporters in Melbourne on Thursday the best thing he could do for the automotive sector was get rid of the "unnecessary burden" of the carbon tax.
He denied there was a split in cabinet between those who did not want to spend more money and others who wanted to bolster support for the sector.
"The government is absolutely at one in its commitment to give the car industry every chance of success," Mr Abbott said.
"It's been a very important part of our economy for a long time and ... I want us to be a country with a car industry."
He said the coalition committed to "very significant ongoing assistance" for the industry during the election campaign, but the key was to get taxes and regulation down and productivity up.
Asked whether the industry could be saved, he said: "There is no doubt that a dynamic economy such as ours is going to evolve over time, but the important point is that we create jobs and preserve jobs."
He said the best "Christmas present" Labor could deliver to the industry was supporting the government's carbon tax repeal bills.
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