Business Secretary Lord Mandelson is to outline a package of government support for the UK car industry in a statement to the House of Lords at 1505 GMT.
Ministers have faced calls to bail out car makers whose sales have slumped as consumer credit has dried up.
Lord Mandelson's package is expected to include a scheme to guarantee loans for car manufacturers.
Downing Street said the measures included long and short term support but were not a "bail-out".
The BBC's business editor Robert Peston said Lord Mandelson would announce loan guarantees for car manufacturers and their suppliers - which had been having difficulty borrowing from banks and financial markets.
State support would be directed towards investment in low-carbon technologies, which could prevent them falling foul of an EU ban on state support for some industries, he said.
'Anti-recession strategy'
Prime Minister Gordon Brown's official spokesman said action was vital to get a sector with "a strong future" through the immediate difficulties caused by the recession.
The spokesman said: "Lord Mandelson and the department have been making clear that, in our view, the car industry is a sector with a strong future.
"So not only are we in a position to provide some support to help them get through this difficult period but also, and this will be a very important part of the announcement, this is about how we provide the right support for them in the future."
 |  This is helping what the government believes are fundamentally sound companies get through a difficult period  Downing Street |
Asked if it would include a cash injection, he said: "This is not a bail-out."
But he said it involved money set aside last year as part of the government's anti-recession strategy.
"Provision was set aside at the pre-Budget report for a number of subsequent interventions and we will be allocating some of that provision.
"This is helping what the government believes are fundamentally sound companies get through a difficult period."
'Thousands of jobs'
Lord Mandelson will set out the assistance package in the House of Lords ahead of a meeting with car industry representatives on Wednesday.
Lord Hunt will respond for the Conservatives but the statement will be repeated in the Commons shortly afterwards when shadow business secretary Ken Clarke will respond.
Richard Burden, the Labour MP for Birmingham Northfield, which includes Longbridge, told BBC Radio 4's World at One programme: "What this industry needs is lines of credit opening up... There are so many thousands of jobs dependent and interdependent on each other in the motor industry.
"It is not an industry that needs bailing out, it is a successful industry. But it needs to be able to maintain the pace of investment in research, in green technologies and so on - if we can get government help to do that, then I think that would be a very positive move forward."
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