Britain, in order to boost its car industry, is studying an incentive plan that would allow car owners to trade in old cars for new ones.

The scheme would probably involve payments of £2,000 vouchers to scrap vehicles that are more than nine years old and offer discounts on new more environment friendly cars.

The plan is designed to boost demand for new cars and help UK's motor industry which is suffering during the recession.

Austria, Portugal, Germany, Italy, Spain and France are among countries that have started such a plan.

Many British ministers are pessimistic about the proposed car scrap scheme as they believe that the plan would mainly benefit countries like Germany and France that produce many of the cars that are sold in the UK.

This is while a similar scheme in Germany has created an important rise in demand for new cars.

The German government is to triple the amount of money it originally set aside from 1.5b to 5b euros under a program which has been welcomed in the country.

UK car producers say that the plan could generate demand for up to 250,000 new cars.

MVZ/SME/MMA