The SMMT has reiterated its call for a scrappage incentive scheme to boost the new vehicle market at a European seminar held in Brussels.

The scheme would allow cars and LCVs more than nine years old to be scrapped in return for a £2,000 cash incentive towards a new or nearly new vehicle.

Given the relative size of the UK market, the SMMT estimates that up to 250,000 cars and 30,000 LCVs could go through the scheme over an 18-month period.

Similar schemes adopted in Germany, France and Italy are significantly boosting the market and reducing CO2 emissions by taking some of the older vehicles off the road, claim the SMMT.

“It is vital that car buyers are given the confidence to buy now and a scrappage incentive scheme is a clear signal which has already proved successful in other EU member states," said Paul Everitt, SMMT chief executive.

“The UK government must align with Europe and take immediate action to protect its automotive sector.”