Buyers snapped up 328,100 new cars in Europe's top economy last month, the VDA said in a statement. During the first three months of the year, more than 750,000 cars were sold, an annualised gain of 14 percent.

Car exports also accelerated, according to the VDA, with 1.16 million sent abroad in the first quarter, a rise of 11 percent.

Nevertheless, the crisis in Japan, as well as a spike in oil prices due to unrest in the Middle East, presents a sizeable risk for the sector, the VDA said, warning that the road ahead was "full of obstacles."

"The news from Japan is overshadowing everything else. But our members are also watching carefully how raw material prices are developing, including oil," \the association said.

"There are also inflation risks in emerging economies that we are monitoring closely."