DUESSELDORF: German autos trade body VDA has nudged higher its forecast for growth in domestic car sales this year even as the sector continues to grapple with the aftermath of the diesel crisis and a looming trade war.

It said it now expected Germany's passenger car market to grow by 1 percent to around 3.5 million vehicles this year, compared with a previous guidance for 3.4 million.

"Despite economic and political uncertainty, the German automotive industry remains strong," VDA President Bernhard Mattes told journalists at a news conference on Tuesday, according to a prepared speech text.

In June, new car registrations were 4 percent higher than in the year-earlier period.

Germany's autos sector is being rattled by a threat by US President Donald Trump to impose a 20 percent tariff on all imports of cars assembled in the European Union.

VDA's Mattes called on politicians to seek a transatlantic compromise that would see both the US and Europe take a step back from tariffs and would comply with the rules set out by the World Trade Organization.

"But if the US should nonetheless unilaterally increase tariffs there will have to be a response," he said.