The VDA has raised its forecast for the German car market for 2006, following a good first half of the year, according to dpa-AFX.

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The organisation has raised its forecast for the full year to 3.4m cars, up from an earlier forecast of 3.35m units. Last year 3.34m new cars were registered.


1.74m cars were registered in the first half of the year, up 1.4% on a year earlier.


June registrations declined 4.6% to 324,000 vehicles, but the VDA attributed this to two fewer working days. Excluding this, registrations would have risen 5%.


German production is also strong thanks to strong export demand from the US and Asia.


New registrations in Germany are expected to be boosted a little by customers bringing forward purchases ahead of a rise in value-added tax (VAT) rates rise by three percentage points at the start of 2007.


The VDA has estimated that the planned VAT increase will cost the automotive industry around EUR4 billion. This includes the impact on car purchases as well as service and repair work.


At the fuel pump alone the additional tax will cost car drivers an extra EUR2bn, according to the VDA.