Germany boosts car scrapping scheme

Germany is to increase the amount of money available for its car scrapping subsidy.

The scheme pays a cash bonus to drivers who trade in cars that are at least nine years old for new less polluting models.

The German cabinet agreed to boost the amount available from 1.5 billion to five billion euros.

In addition, the programme, which was supposed to finish in May, will be extended.

German Economy Minister Karl-Theodor zu Guttenberg said: “It is also very important to have this bonus programme running until 31 December this year. After that, it’s over.”

The scheme is credited with boosting German car sales by 40 percent in March, partly because people thought it was about to end and so rushed to buy new models.

But at the same time, the iconic German convertible specialist Karmann said it cannot pay its bills and has been forced to file for bankruptcy protection.

Karmann has in the past created the convertible versions of Volkswagen, Audi and Mercedes vehicles but now has not more contracts.

It is hoping to restructure as a smaller company making car parts.

Copyright © 2009 euronews

tags: Cars