Auto Sales in Germany Up 21% Due to 'Cash for Clunkers' Plan

A new German government bonus for people who scrap aging cars and buy new ones helped give a powerful boost to car sales in Germany last month, although the nation's auto exports slumped amid global economic gloom, an industry group said Tuesday.

New car registrations in Germany were up more than 21 percent to 277,800 in February compared with the same month last year, the VDA group said. It was the highest February sales level for 10 years and the first time in more than six months that sales have grown, said Matthias Wissmann, the VDA chairman.

"We expect that, in the first quarter as a whole, domestic sales will be above the previous year's level," he added.

As part of a wider $63 billion economic stimulus plan, the government earlier this year introduced a euro2,500 bonus for people who scrap aging cars and buy new ones.

VDA said new registrations of German companies' cars rose 9 percent to 172,700 in February, while foreign brands saw a 48 percent increase to 105,100.

However, the improvement at home contrasted sharply with a steep drop in exports, which were down 51 percent on the year in February to 201,900 cars, VDA said.

Car production was down 47 percent to 281,800 vehicles, it added.

Click here for more auto news from FOX Car Report.