German car sales plunged last month, reflecting an end to a scrappage scheme, but robust foreign demand for Germany's famed luxury models sparked a spurt in exports.
The VDA auto association said it foresaw a 'normalisation' in the car industry this year in the aftermath of car-scrapping premiums in many parts of the world. It also pointed to solid performance expected on Asian markets.
In Germany, car sales fell by 32% in June to 289,400 vehicles, compared with June 2009 when the scrapping bonus was in effect. In Germany the bonus offer expired in September 2009.
But exports surged by 26% last month to 395,000 vehicles, with overall production rising 10%, according to the VDA.
Although car sales have slumped in many European markets, foreign demand has picked up sharply and German car manufacturers like BMW and Daimler are ramping up production in Germany and the US.
A spokesman for BMW said the company was in talks with unions to add night shifts and to cut back on summer holidays. Analysts said that several factors explained the brighter outlook, noting that 'German manufacturers have very strong brands' and have steadily increased investments in research and development.
Elsewhere in Europe, French car sales dipped by 1.2% 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% as consumers brought forward purchases ahead of a rise in VAT sales tax of two percentage points on Thursday. That date also marked the end of Spanish scrappage subsidies.
