Germany's VDA motor industry association said on Monday demand for new cars in Europe's largest economy remained weak last month, with 4% fewer passenger cars registered than a year ago, Reuters reported.

The report said VDA president Bernd Gottschalk repeated his plea for politicians in Germany to speed up decision making, blaming the continued weak demand for cars on consumer uncertainty about tax cuts expected early next year.

"When the auto industry has done everything with all its new models to create the conditions for an upturn in demand and the uncertainty still remains, we have every right to ask politicians... to push on with reforms," he reportedly said in a statement cited by Reuters.

The news agency said Germany's opposition-controlled Bundesrat upper house on Friday voted against proposals for €15.6 billion of early tax cuts next year, although the centre-left government and opposition conservatives are hoping for a deal by Christmas.

Reuters said that while registrations fell to 270,000 in Germany, overseas demand painted a less gloomy picture, with exports up 2% to 324,500 cars and production up 1%.

The news agency noted that the automotive sector, which employs around one in five people in Germany and accounts for around 10% of industrial output, had long been expected to see an upturn in the second half of this year with an array of new models hitting the market.

Luxury car maker BMW posted its first quarterly profit rise of the year last week and said the expected recovery was beginning to materialise, boosted by its recently relaunched 5-series saloon, Reuters said, adding that mass-market maker Volkswagen has fared less well with profits likely to more than halve this year, largely due to troubles at its Brazilian arm and the cost of a massive new model programme - it is however expecting a better year in 2004, with its new Golf V lifting sales volumes.

According to Reuters, after almost four years of decline, Gottschalk has said he expects Europe's biggest car market to pick up again next year and is forecasting 3.25 million new car registrations in Germany this year, the same level as in 2002.

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