The scrappage scheme unfairly benefits the manufacturers of small cars and does not do enough for the premium sector, some car makers have claimed.
In his Budget speach the chancellor announced that when a car more than 10 years old is scrapped the government will offer a £2000 discount on a new car. This discount will be part-funded by the government and the manufacturer of the new car.
However, it is feared that £2000 will not be enough of an incentive to boost the sales of high-end cars.
A spokesman for Jaguar land Rover said the company supports measures that stimulate demand for new cars, but added: “The initiative by several European governments to introduce scrappage schemes has clearly had a positive initial effect on demand, but generally this has been limited to smaller car sectors.
“Accordingly we expect very limited direct benefit of the UK scheme for those manufacturers such as Jaguar Land Rover engaged in the premium sector.”
BMW is also sceptical about the effect scrappage will have but said it does anticipate taking part in the scheme.