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German Car Sales Up In July, But Growth Slows

New car sales in Germany were up 29.5 percent on the year in July, but growth was slower than previous months, suggesting boom triggered by cash-for-clunkers bonus is fading.

BERLIN (AP) -- Sales of new cars in Germany were up 29.5 percent on the year in July, official figures showed Tuesday. The pace of growth was slower than in previous months, suggesting that a boom triggered by a cash-for-clunkers bonus is fading.

The Federal Motor Transport Authority said nearly 340,000 new cars were registered last month. The year-on-year increase followed rises in the previous five months, but was well short of the 40.5 percent climb seen in June, when some 427,000 new vehicles were registered.

The mini and small car segments saw year-on-year increases of 144.1 percent and 67.5 percent respectively in July, the authority said. However, bigger cars fared less well, and new registrations of sports cars were down 29.1 percent on the year.

A euro2,500 ($3,580) 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 Germany's recession-hit economy.

The program was credited with strongly boosting sales. In April, the government decided to expand the program's funding to a maximum euro5 billion from euro1.5 billion.

Last month, officials acknowledged that the funding could be exhausted in September but ruled out pumping in any more money.

The coming months likely will see continued sales growth, "but the level of the first half of the year won't be reached again," said Volker Lange, the head of Germany's car importers association, VDIK.

Detractors have portrayed the scrap bonus program as a dubious gift to voters ahead of Germany's Sept. 27 election, arguing that it may just delay a slump in car sales.

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