The area of industry that is seeing serious gains is the new car market where the programme appears to be stimulating sales.

A spokesperson for one leading motor retailer told the Tele they had “smashed” the third quarter of a year target.

Managing director of Barnetts Jim Brown said, “We’ve sold a great many cars over the last two months. It’s been phenomenal.

“We’ve sold over 100 Hyundais in under eight weeks through the scrappage scheme and business has almost doubled.

“Almost everyone who comes through the door buys with the scheme. I think people are realising that it will come to an end.”

He added, “The target for the quarter three of our year has already been smashed and we had until the end of September to reach it.”

Barnetts has had such success over the past eight weeks that they are having difficulties supplying demand.

“Our biggest problem is getting stock because manufacturers reduced the sales capacity due to the recent downturn,” Mr Brown said.

Fairweather Motors on Kingsway East is also reaping the rewards.

Owner Norman Fairweather said, “We are doing very well. We’ve sold between 60 and 70 cars through the scrappage scheme itself. I think it’s having the desired effect as people who wouldn’t have been in that market previously are realising the benefits.”

While the initiative was criticised in Germany last year for decimating the second hand car market it appears to be improving sales for a number of used car dealers in Dundee.

Manager of South Road-based Autotecnic David Dunne said, “The public are still aware of the great deals you can get on second hand cars. The industry has suffered over the last 18 months so used car prices have come down to a level where customers perceive that it’s good value for money and the market is buoyant.

“Business is doing well and I’d go as far to say it has improved.”

Denis Brown of Whittet Brothers in Dura Street said, “We are selling a lot of cars to younger people and first time buyers who don’t have the old cars to trade in. I think it will take some time to measure the effects of the car scrappage scheme but up to now it hasn’t been detrimental to the business.”

However, at least one second hand car dealer disagrees. Jim Cole of Kender Car Sales in Lochee told the Tele that his business was suffering as customers, inspired by the scheme, sought new cars instead of old.

“It has really affected business — especially on smaller cars. The cost of buying a three-year-old car is now similar to the cost of buying a brand new car, at the cheaper end of the market, under the scheme.

“When you consider they will also receive a new guarantee warranty of up to five years along with a three-year MOT guarantee it makes it really hard to compete. So much so that the sale of our small cars is down 20% since the scheme was introduced.

“The scheme has made the big guys bigger and the small guys smaller.”