Ford Ireland is to start offering car finance directly to customers to encourage them to buy vehicles in the last two months of the year as the industry experiences its worst year for sales since 1987.

Ford is also calling on finance minister Brian Lenihan to introduce a scrappage scheme in December's budget or the abolition of Vehicle Registration Tax (VRT). It is estimated that 70 motor businesses have gone to the wall since the start of the year.

Ford said the biggest problem for car purchasing was that customers could not get credit from banks.

"That is the evidence we are hearing from showrooms," said Eddie Murphy, managing director of Ford Ireland.

A sum of €5m has been ring fenced for the purpose of giving credit directly to customers. The scheme covers new cars. Murphy said the funds were additional money to what was already available in the market.

"There are people out there who want to buy a car; they have a reasonable level of job security and they are looking for a credit provider," he said.

Car buyers around the country are usually required to provide a deposit of 20% of the purchase price, although the deposit was often far lower during the boom years, Murphy explained. He said there was evidence everywhere that banks had tightened credit as they tried to avoid bad debts on their consumer loan books.

Asked if the industry was seeing any sign of 'green shoots', Murphy said: "There is a tiny sign of demand coming back. There is increased footfall, but nobody should get carried away; 2009 has been a horrible year".

He said the industry was showing signs of bottoming out and "there does come a point where you can't go any lower". He said any growth in the market would be very low, possibly up to 5% higher than the sales levels recorded in 2009. A scrappage scheme, however, could aid the industry in a substantial way.

"It has worked in 11 other European states, so why not here? There is no risk in it for the government. If the cars don't sell, they don't sell," said Murphy.

He said the inventory of used cars, which was a major problem for the industry recently, was being dealt with. While there was a very large overhang of commercial vehicles, some of the other used stock had been cleared, he explained.