The European Commission called for PSA Peugeot Citroen to present a restructuring plan within six months in return for approving state aid for the French carmaker's financing arm.
The Commission said it was granting temporary approval for 1.2 billion euros ($1.6 billion) of guarantees for Banque PSA Finance after France offered to guarantee 7 billion euros of its borrowing.
"We expect France to notify to us of a restructuring plan, not just for the banking arm but for the whole PSA group, because this aid also benefits the whole group," a Commission spokesman said.
France would need to ensure both Banque PSA Finance - which provides credit for buyers of Peugeot and Citroen cars as well as providing broader finance to the group - and PSA as a whole were viable in the long term without state support.
Although it is unclear how deep such restructuring should be, the statement will heighten pressure on France's biggest carmaker, which is already cutting 8,000 jobs and closing a major assembly plant.
Europe's second-biggest automaker unveiled in October a government-backed refinancing deal for its lending arm as the struggling French automaker's financial position deteriorated.
PSA Finance received the assistance after it encountered difficulties in borrowing.
With its costly domestic production and high exposure to southern European markets, Peugeot is bearing the brunt of the region's slump as unemployment and government austerity weigh on consumer spending.
The company has announced measures to stem losses approaching 200 million euros a month, while developing future vehicles with General Motors to deliver more savings in five years' time. ($1 = 0.7474 euros)
(Reporting by John O'Donnell; Editing by Philip Blenkinsop and David Holmes)