The federal government will hold talks with a Belgian tycoon who wants to continue making cars at Adelaide's Holden plant, Industry Minister Christopher Pyne says.
The proposal, from Guido Dumarey and his company Punch Corporation, has received tentative support from South Australia Premier Jay Weatherill.
Mr Pyne says he will meet with the company in Canberra next week to discuss the plan.
"The government is working day and night to make that happen," he told reporters in Adelaide on Friday.
Holden, which has not yet received a formal offer from Punch Corporation, remains on track to close its assembly operations by the end of 2017.
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The SA Labor government has revived calls for the federal government to free up $795 million held in the Automotive Transformation Scheme.
SA Manufacturing and Innovation Minister Kyam Maher said the funds should help automotive supply companies that are diversifying into new sectors.
"The federal Liberal government are planning to use (the scheme) for savings," Mr Maher said on Friday.
"With the closure of the auto industry because of the federal Liberal government, this money needs to be spent in South Australia and in Victoria supporting jobs, supporting companies that will take the auto industry's place."
Mr Pyne said the scheme would continue for as long as cars were made in Australia but described calls to change the criteria as a distraction.
"If we can encourage Punch Corporation or any other corporation to take over Holden at Elizabeth, I would be very excited about it," he said.
"And that means the Automotive Transformation Scheme would continue."
