Incentives boost German car sales

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Sales of new German cars jumped by almost a quarter in February, as a cash bonus for scrapping old cars encouraged consumers to buy new ones.

Car sales rose by 22% compared with the same month last year as total sales hit their highest level for 10 years.

The main reason is a 2,500-euro ($3,143; £2,236) government incentive for car owners to get rid of their old vehicle and buy a new replacement.

But exports of German cars slumped by more than half during the month.

'Strongest' sales

A total of 277,800 vehicles were sold in Germany during February - the first time in six months that German car sales have risen.

"This is the strongest level of February sales in 10 years," said Matthias Wissmann, president of the car federation VDA that released the figures.

And he expects the strong sales to continue: "We expect that, in the first quarter as a whole, domestic sales will be above the previous year's level."

The VDA said that registrations of German manufacturers' cars rose 9% to 172,700 vehicles, while those of foreign cars rose 48% to 105,100.

The impact of the government incentive on domestic sales was highlighted by the slump in exports.

The number of German cars exported overseas fell by 51%, to 201,900.

The German car industry, like those in other countries across the world, has been struggling to cope with a dramatic slump in sales during the economic downturn.