Scrappage scheme boosts car sales

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Motorists are able to obtain a £2,000 discount - funded equally by the Government and manufacturers - for new cars and small vans by scrapping vehicles over 10 years old under the initiative.

Ministers professed themselves "very pleased" with the take-up, which represents more than a tenth of the total subsidy available.

A spokesman for the Department for Business, Enterprise and Regulatory Reform said: "We are really pleased that the scheme seems to be delivering a boost so early in the scheme."

All makes of cars have been ordered so far, with London Taxis among those being traded in.

The scheme - for which the Government has set aside £300 million - was launched on April 22, prompting orders to come in to manufacturers.

Actual deliveries started in mid-May, but the formal roll-out got off to a chaotic start when top-selling company Ford was among some manufacturers who delayed taking part.

Last week Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said the scrappage scheme was "enticing car buyers back into the showrooms".

In the UK, 11 successive months of declines in new car sales have led to production cutbacks and job losses.