German auto industry association VDA is feeling a little more bullish about vehicle sales in the country this year, raising its forecast slightly to more than 2.9m.

VDA president Martin Wissmann said he believed the German car industry is pulling out of its sales crisis faster than expected. "We can thus raise our outlook for the domestic market.

The association had earlier expected to sell between 2.8 and 2.9m vehicles as sales plunged following the ending of the government scrappage incentives a year ago.

However sales for 2010 will still show a drop of around 23% over last year which was boosted for most of the year by the incentives.

Exports have remained strong, however, particularly to Brazil, China and India. VDA also forecasts an increase of 21% in exports this year and a gain of at least 10% in overall production.

New car registration figures for October released today show the German car market continuing to shrink, down 20% after slipping back almost 18% in September.

The German motor transport authority (KBA) said 256,775 cars were sold there last month. Sales in the first 10 months are down 26.8% to 2,423,627 units.