<TABLE cellSpacing=0 cellPadding=0 width=629 border=0><TBODY><TR><TD colSpan=3>Tax hampers German new car market
</TD></TR><TR><TD vAlign=top width=416><!-- S BO --><!-- S IIMA --><TABLE cellSpacing=0 cellPadding=0 width=203 align=right border=0><TBODY><TR><TD> Customers bought cars in advance of the new tax
</TD></TR></TBODY></TABLE><!-- E IIMA --><!-- S SF -->Germany saw new car registrations hit a record low in January - following a rise in Value Added Tax (VAT), industry figures show.
The 199,000 vehicles registered last month was a 11% decline on a year ago, the sharpest drop since German unification in 1990.
The slump came after new registrations rose in November and December.
The German automotive association (VDA) said the fall had been expected with VAT climbing from 16% to 19%. <!-- E SF -->
Elsewhere in Europe, January car sales rose.
'Logical consequences'
Sales in the last two months of 2006 had been strong as consumers took advantage of cheaper prices of cars and other big-ticket items before the new tax regime kicked in.
VDA president Bernd Gottschalk said the trend was the "logical consequence" of the VAT hike. Overall January saw a resurgence in demand for cars in Europe - with Italy seeing new registrations rise 3.5% to 248,061 vehicles. Meanwhile France saw registrations increase by 1.8% - marking the first annual increase since October, with Spain seeing January sales at a record high of 116,503 vehicles - a 2.7% surge.<!-- E BO -->
http://news.bbc.co.uk/1/hi/business/6325915.stm
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