The European Commission asked Italy on Friday to provide details on its aid package to the car industry to see if it violates European Union rules on state aid.
A spokesman for Competition Commissioner Neelie Kroes said the EC was concerned that the package was a form of ''selective state aid'' and ''not in line with EU rules''.
Responding to Brussels' concerns, EU Affairs Minister Andrea Ronchi said the government's aid package was not protectionist and was fully in line with EU regulations.
''It's not at all discriminatory and is in line with EU rules,'' Ronchi told reporters.
The government's emergency plan to help the automobile sector - approved two weeks ago - also included measures to boost the sales of motorbikes, home appliances and furniture, for which demand has plunged in recent months.
The measures are contained in a decree which takes immediate effect and needs to be approved by parliament within 60 days.
The incentives, which expire at the end of the year, included a cash bonus of 1,500 euros for the purchase of new cars, those with a Euro 4 or Euro 5 emissions rating.
A bonus of 2,500 euros will be given for the trade-in of light commercial vehicles with higher emission ratings - Euro 0, 1 and 2 - in exchange for new, less polluting vehicles.
A further 1,500-euro bonus will be given for the purchase of vehicles which run on methane gas or hydrogen.
A 500-euro bonus will be given to those who trade in their old Euro 0 and 1 motorbikes for those with a Euro 3 rating and with motors up to 400cc.
Other countries in Europe are considering similar measures.
Figures released by national statistics bureau Istat on Friday showed that new car sales in Italy plunged 29.6% in December, over December 2007, with orders tumbling by 33.3%.
Turnover in the auto industry - including cars and other types of vehicles - dropped 7.6% in 2008, the lowest level since 1993, with orders falling 11.4%, the worst performance since 1992.
