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German car sector shrugs off VW scandal

The German Automobile Association (VDA) expects sales to rise in Germany this year and next. The fallout from the emissions scandal has been low and is not expected to make any significant dent in diesel sales.

New passenger registrations are set to grow by 4 percent this year, VDA President Matthias Wissmann said on Tuesday. The industry association forecasts a sales increase of 1 percent to 3.2 million in 2016.

The VW diesel emissions scandal seemed to leave the German auto market unfazed. In November, new car registrations in Germany jumped by 9 percent to 272,000 vehicles.

"We do not have any signs that diesel is collapsing in the German market," Wissmann said, but added that "there's no question that misconduct has damaged trust in the company concerned, the entire sector and not least in diesel technology."

But he stressed that diesel technology should by no means be written off, as it uses less fuel and was therefore indispensable in reducing CO2 emissions - alongside hybrids and e-cars.

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Cheating at Volkswagen goes back to 2009

Wissman pointed out that - despite the robust numbers - the German market was largely saturated and that other issues such as the lackluster global economy, the slowdown in key markets such as Brazil and China and the threat of terrorism were going to affect the sector going forward.

"The headwinds will become stronger and the challenges will increase next year," the VDA chief said.

Meanwhile, Volkswagen has it problems in the US - sales there plunged by 25 percent in November after the carmaker suspended sales of diesel vehicles in the wake of the emissions scandal, fresh figures showed on Tuesday.

VW is stuck in the biggest business crisis in its 78-year history after admitting it had installed cheating software in around 11 million of its diesel-engine cars to thwart emissions tests around the world. That scandal had centered on nitrogen oxide emissions.

Separately, VW admitted in early November to understating carbon dioxide emissions and fuel consumption.

ng/jlw (AFP, dpa)

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