German Car Sales See Big Boost In May

BERLIN (AP) -- Auto sales in Germany showed another sharp year-on-year rise in May thanks to a popular car-scrapping bonus, while tentative signs of stabilization in foreign markets also offered cheer, an industry group said Wednesday.

New car registrations in May were up 40 percent on the year to 384,600, which was the highest level for the month since Germany's post-reunification boom in 1991, the VDA group said.

Over the first five months of the year, new car registrations were up 23 percent to some 1.6 million.

Germany's euro2,500 ($3,550) bonus for people who scrap cars at least nine years old and buy new ones was introduced earlier this year in an effort to boost the auto industry -- a key part of the economy.

Germany, which is in a deep recession as the global crisis pushes down demand for a wide range of exports, is home to car makers such as Daimler AG, Porsche SE, Volkswagen AG and BMW AG.

German car makers' exports were down 24 percent on the year in March to 246,000 vehicles, VDA said. However, that was an improvement on the 48 decline seen in April and the 38 percent fall in the year so far.

Orders from abroad were down 17 percent on the year in May, but saw a 10 percent improvement over April in month-on-month terms, the group said.

However, it said the good news for auto makers at home failed to compensate entirely for the slump in exports, with production falling 9 percent on the year despite a 19 percent rise on the month.

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