Obama plans 'leaner' car industry
Mr Obama has been tough on the carmakers after huge bailouts
President Barack Obama says he hopes US carmakers will come out "leaner and meaner" from their financial troubles.
General Motors (GM) is currently trying to stave off bankruptcy, while Chrysler has already sought bankruptcy.
GM last week received another $4bn of US government loans, taking its total bailout to over $19bn.
Mr Obama said he thought the US car market could expand to as much as 15 million cars when the economy recovers, from about 10 million this year.
"Ultimately, I think that GM is going to be a strong company and we are going to be pulling out as soon as the economy recovers and they've completed their restructuring," Mr Obama said in an interview with C-Span.
"You are looking at a substantial market that is going to be available for US automakers if they've made some good decisions now," Mr Obama said.
"My hope is that we will see both GM and Chrysler having emerged from this restructuring process leaner, meaner, more competitive with a set of product lines that appeal to consumer," he added.
GM has a 1 June US government deadline to restructure its finances or face bankruptcy protection. The carmaker is aiming to sell its European unit Opel, including UK brand Vauxhall, as well as Sweden-based Saab, its other European car business.
Last week, the US Treasury said it would give GMAC $7.5bn (£4.7bn) in further state aid, to help it offer loans to potential Chrysler and GM car buyers.
GMAC, which is part-owned by GM, failed to meet the government's "stress test" and the Treasury ordered it to raise $11.5bn in extra capital. But the firm failed to raise money privately.
This is the second time the government has intervened to help GMAC. In December, the government stepped in with a $6bn bail-out of the firm.
"Our auto industry is the foundation for economies all across the Midwest," Mr Obama said.
"Had we allowed GM or Chrysler simply to liquidate that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression."