German's Finance Minister, Peer Steinbrueck, told German parliament today that car manufacturing could receive further government support based upon recent evidence that the economic situation had deteriorated dramatically.
Steinbrueck said that every seventh or eighth job in Germany was dependent on automakers and it would be "fatal" not to support them when competitors in the United States are receiving billions of dollars in government aid.
The German government has so far launched economic stimulus plans worth up to 80 billion euros ($104.6 billion). These include incentives for new car buyers, as well as investment spending and tax cuts.
The government has also put aside 1.5 billion euros to fund a program which offers 2,500 euros to people who swap cars at least nine years old for new models.
Matthias Wissmann, head of Germany's VDA automotive industry association, said the scrappage incentive could help maintain new-car sales at 3 million units in 2009, roughly the same figure as in 2008.
The German Finance Ministry said that the domestic economy is increasingly suffering from a decline in foreign demand and the global financial crisis shows no sign of ending soon.