FRANKFURT/BERLIN: German car sales grew the most in seven years in 2016, the VDA industry association said, but analysts expect the expansion to grind to a halt this year amid a weakening economy and rising petrol prices.
Registrations of new passenger cars in Europe's largest auto market rose 5 percent last year to 3.35 million vehicles, the highest level since 2009 when deliveries were fuelled by state-backed scrapping premiums, the VDA said on Wednesday.
But December deliveries only rose 4 percent despite two more selling days than a year earlier, held back by weakening momentum in commercial registrations.
"Growth dynamics in the German car market should weaken noticeably in the new year," said Peter Fuss, a senior partner and automotive specialist in Ernst & Young's German practice.
"Further growth will be difficult from a sales level that is already high," Fuss said, forecasting deliveries to rise another 2 percent in 2017 on the back of persistent sales incentives.
Incentives in Germany have risen by about a quarter since 2010 and will sustain sales again this year, said Ferdinand Dudenhoeffer, head of the Center of Automotive Research, predicting registrations to be flat this year.
Germany's expansion last year was mirrored by a second year of strong growth in France, Europe's third-largest auto market, where deliveries increased 5.1 percent to more than 2 million vehicles, helped by a 5.8 percent gain in December.
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