The VDA said that thanks to the scheme, whereby people can get €2500 off a new car if they scrap their old one, 26 percent more cars were sold in the first half of 2009 compared to the year-earlier period.

In June alone, 427 000 shiny new cars drove off German forecourts — a rise of 40 percent and the best June since the unification of West and East Germany in 1990, the VDA said. A new tax regime also helped.

"Thanks to high order levels we expect the overall market to surpass the 3.5-million mark," compared to 3.1 million in 2008, the VDA said in a statement. Its previous forecast was for 3.1 million.

But with the "cash for clunkers" scheme due to expire at the end of the year, or when the five billion euros that the government has set aside is used up, the VDA said that in 2010 this level would "definitely not be matched."

And with four-fifths of the cars made by German firms like Volkswagen and BMW sold abroad, where conditions "are by no means rosy", the mini-boom in the German market is no reason for "euphoria," VDA chairman Matthias Wissmann said.

AFP

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