Car sales in Germany, Europe’s biggest car market, jumped 40 per cent last month, fuelled by government incentives for motorists to scrap their old cars and buy new ones.

The market climbed just over 20 per cent when adjusted to match the working days of March this year and last year, when the Easter holidays were earlier.

World car markets have been hit by large slumps in demand over the past several months. But, this week, some European markets have shown flickers of life, boosted by scrappage schemes.

Yesterday, the French market increased by 8 per cent and Italy saw a minor rise of 0.24 per cent and Spain slowed some of its decline with a 38 per cent fall compared with a 48 per cent drop in February.

Germany is offering €2,500 for drivers who have cars that are over nine years old to scrap them and buy new ones. The scheme is to be extended until the end of the year after fears that the programme would run out of cash by the end of this month because it has proved so popular.

Britain has not yet introduced such a programme despite persistent pressure from the car industry and unions.

In Germany, 401,000 new cars were bought last month.

But the success of the scrappage scheme for new car sales has triggered complaints from the country’s other retailers who have complained that demand is being taken away from other sectors.

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