The KBA transport authority said 241,399 new vehicles hit the road in January, up 10.5 percent on the same month a year earlier.
The increase comes after carmakers already sold more vehicles in Germany last year than in any other year since 2009, driven by strong consumer demand at a time of low unemployment and high wages.
A total of 3.4 million new cars were registered in 2016, with German automakers accounting for most of the vehicles sold.
Embattled Volkswagen held on to its crown in January, retaining more than 20 percent of the German market with its own-brand cars, as customers continue to shrug off the group's 'dieselgate' emissions cheating scandal.
The group's luxury brands Audi and Porsche faced stiff competition however from Mercedes and BMW, which both reported double-digit increases.