By Erik Kirschbaum

BERLIN, Sept 8 (Reuters) - Chancellor Angela Merkel called on the German car industry do more to help fight climate change ahead of next week's international car show (IAA) in Frankfurt.

In her weekly podcast, Merkel said German manufacturers needed to rise to the challenge of competitive world markets and it was essential they "keep their eye on" reducing emissions.

Merkel, whose government pledged to cut greenhouse gas emissions by up to 30 percent by 2020 from 1990 levels, is a former Environment Minister. She has pushed climate protection to the top of the agenda at several international conferences.

"I'm looking forward to see what the German carmakers will be presenting in the areas of new technology and new environmental protection measures," said Merkel, who will formally open the car show to the public on Thursday.

She observed that Matthias Wissmann, the new president of the German automobile association (VDA), said last week the German carmakers were "re-inventing the car" and to meet the future challenges.

"And among those (challenges) is clearly doing more for climate protection," said Merkel.

She pointed out her government had recently agreed to work for tax rule changes on cars -- with lower taxes for low-emission vehicles and higher taxes for higher emissions.

"If the German car industry can rise to the technical challenges, maintain high quality and keep their eye on climate protection, that will ensure jobs in the future and help to expand its export position," she said.

German carmakers have long resisted pressure and legislation to make less polluting cars. They have been slow to cut cars' carbon dioxide (CO2) emissions and improve fuel efficiency.

They have been hurt by a steep fall sales in the domestic market this year. The market was hit by a 3 percent increase in value-added tax, growing consumer concerns about the environment and an uncertainty about tax changes based on emissions.

German carmakers have been criticised for resisting the development of hybrid engines and low emission cars while such imports from Japan and South Korea enjoyed growing popularity.

New car registrations in Germany, where domestic makers have long dominated, have fallen in each of the first eight months of the year for a cumulative drop of 8 percent.

The demand from private customer -- excluding company car purchases -- shows an even more dramatic decline, with new purchases down about 30 percent.

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