Call for scrappage extension; Group's appeal over car sales.

Byline: ALAN JONES

A BUSINESS group today urged the Government to extend the car scrappage scheme or risk undermining industry's recovery from recession.

The Engineering Employers Federation warned that manufacturers could slide into a "double dip" recession without further help.

In a letter to the Chancellor, the EEF said the scheme had helped stem the decline in production in the motor industry and helped retain significant numbers of skilled workers.

But the EEF said it was "far from certain" that consumer demand for cars could be sustained without incentives to replace older vehicles.

Director of policy Steve Radley said: "The success of the scrappage scheme has been clear for all to see and has put a floor under manufacturing recession and helped retain skilled employees.

"However, it is no means certain that this positive trend will continue with consumer confidence still fragile and unemployment still rising. " The Society of Motor Manufacturers and Traders have been pressing the Government to extend the scheme, which allows new car buyers to receive a pounds 2,000 discount when scrapping a vehicle more than 10 years old.