The UK government would possibly launch a scheme for car owners to replace their existing ones with new ones in order to create demand in the automobile industry, the BBC reported Monday.

The report said the scheme will consist of a payment of GBP 2000 to trade in cars that are a certain number of years old.

The government is likely to unveil the scheme in the budget statement on April 22.

Earlier in April, Paul Everitt, chief executive of Society of Motor Manufacturers and Traders or SMMT said, A scrappage scheme will provide the incentive needed and the evidence is clear that schemes already implemented across Europe do work to increase demand. The UK is the only major European market not to implement a scheme, Everitt added.

Last week, the German government more than tripled its car-scrapping bonus scheme to EUR 5 billion from an initial EUR 1.5 billion. The scheme is expected to benefit nearly two million people, an increase from the initial estimate of about 600,000. The scheme was to end on May 31, but now it is extended till the end of the year.

For comments and feedback: contact editorial@rttnews.com