The Slovak government will pay drivers up to 1,500 euros to scrap cars over 10 years old and buy new vehicles under a 33 million euro ($41.74 million) plan.
Slovakia’s approval of the scheme came after news that car sales in Germany rose a fifth in February helped by government scrappage incentives.
Encouraged by a 2,500-euro bonus for scrapping cars older than nine years and tax changes that favor fuel-efficient models, Germans have been rushing to showrooms.
Registrations of new cars in Germany increased 21 percent to 278,000 units -- the best February sales in a decade -- and held out hope full-year sales could top 3 million units, the VDA industry association said.
Under the Slovakian government program, consumers and local businesses will get a subsidy of 1,000 or 1,500 euros to buy a car worth up to 25,000 euros.
"We've proposed that car dealers who do not co-finance will get 1,000 euros and those willing to give 500 euros from their budgets will get 1,500 euros from the state," Economy Minister Lubomir Jahnatek said.
Prime Minister Robert Fico said earlier this week that scrapping old cars was a useful measure to support consumption, and that it was also Slovakia's significant contribution to restarting the car industry.
The ministry aims to introduce the subsidy in the coming days in a scheme that mirrors steps taken in other countries to bolster struggling domestic car industries.
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