Germany has more than trebled its investment in its car scrappage scheme.
German chancellor Angela Merkel confirmed that the government will increase funds for its car scrapping subsidy to 5 billion euros (£4.5 billion) from 1.5 billion euros (£1.3 billion).
It was also confirmed that the scheme will not run beyond the end of this year at the latest.
In Germany, car buyers receive 2500 euros (£2250) for scrapping a car more than 9 years old and replacing it with a new, more fuel-efficient model.
Official figures show that German car registrations increased 40 per cent to about 401,000 in March.
France and Italy have also already introduced their own scrappage schemes, with car sales immediately improving as a result.
The US government is also debating a similar scheme, although talks have stalled over plans to only offer the scrappage discount to people buying American-made cars.
The British government is also mulling over introducing a scrappage scheme, with any announcement likely to take place in the budget on 22 April.