Volkswagen UK is offering customers discounts of up to £6,000 to trade in diesel vehicles when buying a new car.
All the Volkswagen UK brands - including Audi, Seat, Skoda and Volkswagen Commercial Vehicles - will participate.
VW launched a more generous scheme in Germany in August in the wake of its diesel emissions scandal.
Competitors in the UK, including BMW, Ford, Hyundai, Mercedes-Benz and Vauxhall have already launched schemes.
Rival Toyota also launched a scrappage scheme on Friday, offering up to £4,000 off a new Toyota.
VW's UK scheme is a continuation of the initiative launched in Germany, which was brought in after a top level summit between politicians and the country's leading carmakers, including BMW, Daimler and Opel.
VW's German scheme offered a discount of up to 10,000 euros (£9,000) to trade in diesel vehicles.
Diesel cars have been under scrutiny over high levels of nitrogen oxide emissions, sparked by VW's diesel scandal.
Two years ago, it was revealed that Volkswagen had cheated emissions tests that affected 11 million vehicles worldwide.
Car manufacturers have been under increasing political pressure, especially in Germany, to encourage consumers to buy less polluting cars.
VW's UK scheme will apply to any diesel vehicle that has emissions standards lower than Euro 5 and was registered before 2010.
Incentives range from £1,800 off a new VW Up! to £6,000 off a Sharan people carrier.
Electric and hybrid vehicles, which attract government grants, will be included in the scheme.
So, for example, an e-Golf, which gets a £4,500 grant from the government, will also have VW trade-in saving of £5,500, adding up to £10,000 off in total.
Jim Holder, editorial director of Haymarket Automotive, told the BBC: "The car industry is trying to get on the front foot after an extended period of negative headlines in the wake of dieselgate.
"It's a fact that the latest, Euro 6 compliant petrol and diesel engines are rated as substantially cleaner than these older engines, and this is a great way of both publicising the giant strides the industry has made and also stimulating demand for sales at a time the car market is down year-on-year."
He said VW's scrappage incentives would vary from country to country due to factors such as transport costs and vehicles being cheaper in its home market.
However, he said it would also be important to VW that its UK competitors have similar schemes running, and VW will probably have pitched their discounts at that level in order to compete.
VW's UK scheme offers substantially higher discounts than some of its competitors, which seem to hover around the £2,000 mark as an upper limit.
Mr Holder added that "it's not clear" what impact the VW scheme will have on vehicle sales.
"Owners of older vehicles typically don't have the money to spend on a new vehicle, even with these discounts - in normal circumstances it would be far more likely that they would trade up to another, less old used car.
"However, there are some potentially good savings here, and the positive publicity could stir interest at a time when registrations are down across the market," he said.
He added that by matching rival offerings VW will probably keep its advantage over its opposition.
"Sales have been robust in the wake of the dieselgate scandal, and it's worth remembering that no cars on sale today were affected by that issue, and that the VW Group is still the largest spender on R&D in the car industry, leading to its impressively strong line-up of cars," he said.
The Japanese car giant's scheme runs from 1 September to 31 December and is open to any vehicle more than seven years old.
Customers can get a discount of £2,000 off models including Aygo, Prius and Hilux, and £4,000 off a Land Cruiser.
Paul Van der Burgh, Toyota GB managing director, said: "Our scrappage scheme is a win-win solution. Motorists can dispose of their older vehicles and have access to our cleaner, more efficient model range."