Just as the Paris motor show opens, with all the usual Gallic glitz and glamour, the wheels fall off the global car industry. C'est la vie.

Indeed, never has the term crash been so appropriate for exhibitors and customers alike. Franz-Josef Paefgen, head of the VW-owned Bentley, said: “The market is the worst I have ever seen because there is total uncertainty.”

Many carmakers were breathing sighs of relief that they did not have new models to parade in Paris because the only issue in town now is how bad the market is and how much worse it is going to get.

The motor show follows swiftly on from last month's dire sales figures in the United States and ahead of what is expected to be a very poor UK performance.

Some manufacturers are believed to be so shocked by their sales figures in Britain that they are buying their own stock and pre-registering the vehicles. They are also offering substantial discounts to fleet buyers and private motorists to try to get things moving.

The appalling state of the American market is one of the reasons that the US Government has pledged a $25 billion (£14 billion) fund to stimulate investment in green technology.

However, Dr Paefgen attacked the aid package as anti-competitive. He said: “In the US the carmakers are not in a healthy position but for competition this can't be the right approach.”

Other large European carmakers were more circumspect as they waited for the details of the fund and the possibility that they could secure a slice of it if they have operations in the US.

General Motors, which last year clung on to its position as the world's biggest carmaker, said that trading was the worst for about 20 years. Fritz Henderson, chief operating officer, said he expected sales to continue declining through to the end of June next year.

As part of a radical restructuring, GM is cutting 20 per cent of its managerial costs, which will mean a reduction of about 15 per cent of salaried jobs. Last month, the group's sales in its homeland fell 16 per cent compared with September last year.

Ian Robertson, the chairman of Rolls-Royce , Bentley's luxury cars rival, and a member of the BMW board, said: “Things are happening that are unprecedented and at a speed which is in uncharted territory.”

BMW has also cut production as its worldwide sales have declined, although it is not cutting work in the UK, where its MINI brand remains one of the automotive industry's few success stories. Mr Robertson said that the German carmaker remained committed to the US market despite recent heavy sales slumps for many manufacturers there. Toyota said that the falls in sales had put the US market back ten years in terms of volume.

It is now expected that annual sales in America will fall to about 14 million vehicles in the next year, compared with last year's total of 16.15 million.

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