Warning bells were sounded after Thursday's decision by Holden to pare back output at its Adelaide plant.

Senior BlueScope management expressed concern during talks with union officials about the effects on Port Kembla, where steel is made for car components.

"They are under a tremendous amount of pressure, not only because of the reduction in cars, but also because of a flood of imported product into the market from overseas," said Wayne Phillips, assistant Port Kembla branch secretary with the Australian Workers Union, who was in the talks.

"It is the first time I have ever heard BlueScope management talk about the slowdown in the car industry."

Australian cars are made with a combination of foreign and domestic steel.

Often the sheet metal used for a car's body is imported, while the components inside the vehicle are made using domestic materials.

Making cars sucks up 8.5 per cent of Australian-made steel. At BlueScope, the industry absorbs about 10 per cent of steel production, according to the company's latest annual report.

BlueScope, which is in its closed trading period, did not comment on the issue.

Throsby MP Stephen Jones, who chairs a parliamentary taskforce into manufacturing, said any downturn in the car industry will have ramifications for steelworkers, including those in the Illawarra.

"Just as the downturn in the building and construction sector had a big impact on BlueScope's domestic markets, so too does a downturn in car manufacturing have an impact on its steelmaking," he said.

Domestic car makers have been under pressure as a strong Australian dollar makes overseas competition difficult.

Passenger vehicle shipments fell 26 per cent to $1.35 billion in 2011 compared with the previous year, according to the Australian Bureau of Statistics.