Car sales surge

The Federal Statistical Office said on Monday that new registrations rose by 22.8 percent in the January-May period.

The Wiesbaden-based office said that this surge was a result of the government's car-scrapping program, which pays consumers 2,500 euros ($3,520) for trading in a car that is at least nine years old for a more efficient one.

Meanwhile, the German automobile association, ADAC, advised prospective buyers to apply for the payout before the end of August. The Bild newspaper quoted a spokesman for the association as saying that, as the funds for the German government's cash-for-clunkers program are likely to expire soon, those intending to take advantage of the 2,500-euro incentive should apply in the next two weeks.

The positive news for car manufacturers was limited to domestic sales. Officials from the Federal Statistical Office said that German car companies exported only 1.2 million new cars in the period, marking a near 40 percent decline compared with the first five months of 2008.

Germany imported nearly 12 percent more cars during the period than in the first five months of last year.

Sales up in western Europe

The German auto federation, VDA, said late last week that new car sales in western Europe rose for the second month in a row in July. The federation said in a statement that year-on-year sales across the region rose by five percent to 1.22 million vehicles last month.

The VDA said that the growth had been driven by cash-for-clunkers government bonus programs.

In a country-by-country breakdown, Germany posted a stunning 30 percent increase in sales, thanks to the runaway success of car-replacement premiums. Meanwhile turnover rose six percent in Italy, three percent in France and two percent in Britain.

The VDA said, without the strength of the German performance, new car sales in western Europe would have declined two percent in July.

Eastern Europe suffers

However, eastern Europe continued to suffer. Turnover in the former communist states of the European Union fell 21 percent compared to July 2008, as the global crisis continued to batter economies throughout the region.

Those losses impacted on total car sales in the European Union, leading to an only three-percent rise year-on-year to a total of 1.297 million vehicles.

rb/AP/AFP/dpa

Editor: Susan Houlton