High oil and energy prices are hitting the middle classes "to the bone", a motor industry chief said as he appealed to politicians across Europe to help restore consumer confidence.
Carl-Peter Forster, General Motors Europe president, also warned that confusion over future environmental policies in Europe "paralyses" purchasing decisions of European consumers and was hitting car sales.
Speaking at the Paris Motor Show, he said: "In view of the gloomy market developments in Spain, Great Britain and Germany there must be an end to the uncertainty for consumers.
"The high oil and energy prices are hitting the middle class to the bone."
He called for "clear, transparent European-wide environmental policies and laws" to help end the uncertainty he believed was undermining consumer confidence.
Car manufacturers were showing off their latest products in Paris against the backdrop of an unprecedented set of economic challenges, said Mr Forster.
The UK, Ireland, Spain and Italy were especially vulnerable to the risk of recession due to the ongoing credit crunch, compounded by price corrections in the housing market, he said.
"The deteriorating value of the British pound, compared to the Euro, is hurting sales. We actually sell more vehicles in the UK than we build there, and the weak buying power of the pound has put a new car purchase beyond the reach of many people who might otherwise be in the market right now.
"We are hearing announcements from automobile manufacturers, and our critically important suppliers, that weak sales are driving cutbacks and plant closings, and I'm afraid there will be many more announcements in the weeks ahead."
Workers at Ford's Transit van factory in Southampton this week started a four-day week as the company cuts production in response to the economic downturn, with 17 non-production days planned between now and the end of the year.
New car sales figures next week are expected to show a big fall in the number of registrations last month compared with September last year.