A $5bn low interest loan by the end of March should be all the federal funding Chrysler needs, according to media reports.

The loan would help Chrysler through to the crucial July summer holiday shutdown period when US auto makers traditionally close their plants for up to two weeks to retool their factories for the new model year, a company spokeswoman was quoted as saying.

The comments came after Chrysler chief financial officer Ron Kolka had earlier been quoted saying Chrysler would need additional government loans or face a cash shortage in July. Kolka, the spokeswoman subsequently said, was explaining when the next large cash usage would occur.

Chrysler has already received $4bn in government loan aid and last month told the US treasury it needed another $5bn to avoid bankruptcy.

Kolka also said Chrysler would reaching a deal with the UAW union complying government loan terms which include lowering hourly labour costs to match ‘transplant’ run by Japanese-owned automakers.