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Driving sales

August 4, 2009

New car registrations in Germany jumped by 30 percent in July, boosted by a state subsidies encouraging drivers to replace old vehicles with more climate friendly cars.

https://p.dw.com/p/J3YZ
A shipment of Fiat compact cars on a parking lot
The compact car segment registered the biggest rise in German salesImage: picture-alliance/ dpa

Europe's biggest car market "stabilized further" with the registration of 340,000 new vehicles and a smaller fall in exports, according to a statement from the national auto industry federation VDA.

German car dealers have sold 2.4 million vehicles since the beginning of this year, up 27 percent from the first seven months of 2008.

"This trend, along with orders for 487,000 vehicles, gives us confidence," VDA President Matthias Wissmann said in the statement.

A "cash for clunkers" subsidy of 2,500 euros ($3,595) for drivers who scrap old cars and buy new ones has helped boost small car sales in Germany by 67.5 percent, according to the federal auto statistics body KBA.

Meanwhile, VDA statistics showed that German auto production slipped by 5 percent in July.

The fact that the rise in car sales has been accompanied by a drop in domestic auto production shows that foreign brands like Fiat, Hyundai, Alfa Romeo and Lada have been the major beneficiaries of Germany's car scrapping plan.

While domestic manufacturers such as Volkswagen, Audi, and Opel managed to secure some modest pieces of wrecking bonus pie, KBA statistics indicate that luxury brands like BMW, Mercedes-Benz and Porsche have seen sales plummet.

Auto exports also declined by 12 percent in July, VDA figures showed, but that still marked an improvement over the 31 percent drop observed between year-on-year between January and July.

sje/AFP/dpa

Editor: Sean Sinico