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New car registrations in Germany, Europe’s biggest market, rose 40 per cent in March as scrappage incentives kicked in.
The German government is offering Euro 2,500 to consumers who trade in cars that are at least nine year old if they buy new cars in exchange.
Similar schemes are also in place in France and other European countries as governments seek to prop-up demand in the downturn.
In the UK, automotive and transport trade bodies have called repeatedly for a scrappage scheme to be introduced.
Ford of Britain boss Nigel Sharp said earlier this month that if a scheme was to be introduced in Britain, it would probably be launched on Budget day this month.
He added, however, that due to administrative reasons, the scheme would not be implemented until June or July.
Scrappage proponents argue that a scheme will boost sales and give an immediate boost to car manufacturing and the parts supply chain.
Those against a scheme say it pulls sales forward, is short term in approach and environmentally flawed.