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Scrappage scheme boosts German new car market

German new car sales were boosted by 40% in March compared with the same time a year ago due to the introduction of a scrappage scheme.

The VDA automobile federation said sales in March hit 401,000 vehicles. The rise is the biggest since 1992.

In Germany, drivers get £2,220 for trading in a car more than nine years old. The scheme will be phased out by the end of this year.

More than 900,000 motorists in Germany have signed up for the car scrapping scheme, which was originally planned to be limited to 600,000 applicants.

Despite the rise, the VDA has warned that sales will slow down throughout the year as the number of people taking up the scheme reduces.

Industry commentators in Germany have said that the “sales party will inevitably be followed by a hangover”, warning that the short term boost in demand would cause setbacks for the market later this year.

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