New car sales in Germany fell 10% in August from the same month a year earlier according to the German automotive trade body the VDA.

The VDA said however that the drop was due to the loss of two business days this year.

When adjusted for the two fewer days this year, the market was roughly stable however, the VDA said.

VDA said the domestic market was undermined by a weakening economic climate that had fuelled consumer resistance.

The business climate in Germany is at its lowest for three years according to Ifo, a think-tank. German consumer sentiment is also reported to be at a five-year low.

In the first eight months of the year, the number of new car registrations had risen by 2% to 2.1m units.

VDA forecasts a total of 3.2m car sales for all of 2008, a slight gain on last year.

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