The federal government cannot defend injecting money into the local car industry when consumers aren't buying Australian-made cars, opposition treasury spokesman Joe Hockey says.
Mr Hockey said the government had expected 300 new jobs would be created through a $34 million subsidy for Ford Australia.
However, Ford this week announced it would axe 440 jobs at its Broadmeadows and Geelong plants by November.
The job cuts are due to a slump in large-car sales.
"The issue is Australians are voting with their feet in not buying Australian-made vehicles," Mr Hockey told Network Seven.
"Writing out a cheque with no conditions to Ford or General Motors is wrong."
Federal environment minister Tony Burke said the government's investment in the car industry was a smart move.
"That investment is about making sure that you've got a car industry to deal with the new demands of consumers where they're wanting more efficient vehicles."
The money was part of a $103 million package supplied by Ford's US parent company and the federal and Victorian governments.
The federal government has committed $5.4 billion until 2020 to the car industry.
Mr Hockey said that if other sectors could survive without subsidies, so could the car industry.
"I don't like handing out taxpayer money to industries because ultimately it's someone else's increased taxes," Mr Hockey told reporters in Sydney.
"The car sector should survive in Australia without taxpayer subsidies."