German car sales plunge in June, exports climb: federation

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New car sales plunged in Germany, Europe's biggest car market last month, but exports picked up amid a "normalisation" of the sector, the VDA automobile federation said on Friday.

The latest data, on a 12-month comparison, illustrate the effects of a German auto-scrapping premium which expired last year as well as a rebound in foreign markets.

In Germany, car sales fell by 32 percent in June from the level 12 months earlier to 289,400 vehicles, a VDA statement said.

New car registrations for the entire year were now forecast to fall by about 25 percent to 2.8-2.9 million vehicles, owing to the ending in September 2009 of state subsidies for the scrapping of old cars, it added.

In France, car sales dipped by 1.2 percent in June, with foreign brands faring better than domestic rivals.

The French data was published just as a scrapping bonus launched to help that country's sector through the 2009 economic downturn was cut back further.

But Spanish car sales surged 25.6 percent as consumers brought forward intended purchases ahead of a rise in VAT sales tax of two percentage points on Thursday.

The date also marked the end of Spanish cash-for-clunkers subsidies.

Although car sales are slumping in many European markets, foreign demand has picked up sharply, and German premium auto manufacturers like BMW and Daimler have scrambled to ramp up production here and in the United States.

German exports soared by 26 percent in June to 395,000 vehicles, while overall production gained 10 percent, VDA said.

"Foreign trade is undoubtedly the industrial engine at the moment," VDA president Matthias Wissmann told a press conference in Berlin.

"We are seeing international markets pick up much more rapidly than many had expected. The drivers of growth are above all Asian markets," he added.

Wissmann nonetheless sought to put foreign sales in perspective, recalling that German exports had been particularly weak in mid 2009.

He added that "the current year will be one of normalisation" for the auto industry following a surge in 2009 sales thanks to car scrapping schemes in many parts of the world.

© 2010 AFP

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