The government could help boost car parts production by extending the scrappage scheme, it has been claimed.

According to the Society of Motor Manufacturers and Traders, the cash for bangers initiative has resulted in a dramatic fall in the rate of decline in auto building.

In light of this, the industry body has written to business secretary Lord Peter Mandelson to ask that additional funding be made available so the programme can continue.

Chief executive Paul Everitt said avoiding a significant drop in the number of people looking to buy cars is critical to the country’s economy.

He stated: "An extension to the scrappage incentive scheme, which has already proven its credentials as a cost-effective support mechanism, will ensure a more stable outlook for vehicle demand."

In related news, What Car? magazine has also claimed that keeping the cash for bangers initiative going with extra funds could help counteract rising auto prices.

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