Business Secretary Vince Cable has indicated car manufacturers can no longer count on direct financial support from the Government.
The Government intends to build "a stable business environment" for the automotive industry by "creating a more supportive tax environment, freeing up credit through the banking system, reducing regulation and focusing on training and apprenticeships".
Mr Cable was addressing an international automotive summit in London, organised by the UK's society of Motor Manufacturers and Traders (SMMT).
He said: "The car industry has endured tough times in the last few years but we are now seeing reasons for cautious optimism.
"Low-carbon cars offer opportunities for future business growth and the UK is leading the way with Toyota's plant in Derby this week starting production of the first mass-produced fully hybrid car in Europe and Nissan starting recruitment at their electric battery plant in Sunderland."
Earlier in an interview with the Financial Times, Mr Cable said: "We don't want to go around the country waving a cheque book."
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