CAR industry bodies have welcomed the government’s decision to extend the cash-for-bangers scheme, saying it will help the ailing automotive sector achieve a lasting recovery.<br /><br />Business secretary Lord Mandelson announced at the Labour party conference yesterday a £100m extension to the scheme, which equates to 100,000 vehicles. He also widened the cut-off period to trade in old cars by six months.<br /><br />“The extension will inspire consumer and business confidence,” Society of Motor Manufacturers and Traders’ (SMMT) chief executive Paul Everitt said. <br />“It will help to stimulate demand, giving more consumers access to it, and create a bridge to a period when economic growth is strengthened and more sustainable,” he added.<br /><br />The SMMT has been calling for an extension to the scheme since it was first announced in the Budget in April.<br /><br />Mandelson also improved the scheme for van owners, who can now trade in their old vehicle if it is over eight years old, instead of the previous 10.<br /><br />“As Britain’s automotive and wider manufacturing sector continue to play a large role in helping the UK economy emerge from recession this positive announcement comes at a very critical time,” David Raistrick, UK manufacturing leader at Deloitte said. <br /><br />The scheme, which has been letting drivers trade in their old cars for £2,000 towards buying brand new ones since May, was “running out,” Mandelson said yesterday. <br /><br />“We cannot do everything but that does not mean doing nothing,” he added, as he set out the terms of the extension. <br /><br />Some 227,750 orders for new cars have so far been made through the incentive. It costs the government £1,000 for each car, meaning that £227m has been spent on the scheme. <br /><br />Including the extension, £400m will have been spent on the scrappage scheme, which is due to end in February.