Page last updated at 14:21 GMT, Sunday, 1 March 2009

More calls for car scrap scheme

Jaguar Land Rover factory in Solihull
The car industry has been hit by the slowdown

The AA has joined calls for a scheme which would pay motorists to trade in their old cars and buy new ones.

Support for the programme, already backed by motor manufacturers, comes amid fears new registration sales will not sufficiently boost the industry.

But the government has said it was unsure the "scrappage" scheme would provide value for money.

The 09 registration plates have gone on sale but analysts expect a low-take up as consumers tighten their belts.

Several car firms have had to cut jobs and reduce workers' hours in response to slowing demand.

Green incentive

The "scrappage" scheme has been adopted in several European countries.

As well as giving a boost to the carmaking sector, which is among the industries suffering most in recession, many believe it could also help meet targets for cutting greenhouse gases.

In Germany, drivers get 2,500 euros (2,220; $3,170) for trading in a car more than nine years old, while in France motorists can receive up to 1,000 euros. Scrappage has also recently been introduced in Spain.

"There will be fewer new registration plated cars on the road than for many years and this will be a very visible example of how the credit crunch and hard economic times have slashed new car sales," said AA spokesman Paul Watter.

"There is no time to lose in introducing a scrappage scheme which is adopted policy in a large number of European countries.

"We must give a boost to the sale of new cars which are cleaner and safer than the ones they replace."

'Committed'

The number of new cars registered in the UK in January declined 30.9% year-on-year, according to industry figures, worse than December's contraction. February's figures are due to be published this week.

The Society of Motor Manufacturers and Traders (SMMT) has also been pressurising the government to offer financial help to owners of older cars to persuade them buy newer models.

Last month, chief executive Paul Everitt said there was "a clear need to stimulate demand for new vehicles in the UK market".

And a spokesman said the industry remained "firmly committed to the introduction of a workable scrappage scheme".

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