German car sales slumped 9 per cent in 2007 to their lowest level since the nation's historic unification more than 17 years ago, data released Thursday showed, as soaring energy prices and an unpopular tax rise hit the auto sector, according to dpa. Germany's car industry association (VDA) said that car sales in Europe's biggest auto market fell to about 3.15 million last year, in sharp contrast to an 11 per cent rise in exports which hit a new record high. The dramatic drop came in the wake of the hefty and unpopular 3.0 percentage point increase in value-added tax introduced at the start of 2007, rising petrol prices and the on-going debate about climate change. Reflecting the surge in sales in December 2006 as car buyers attempted to avoid the increase in the VAT, auto sales were 20 per cent down in December 2007 at 243,000 compared to the same month of the previous year. But despite the contraction in domestic auto sales, German car production climbed to its highest level ever, powered ahead by record car exports. Last year was the fifth consecutive year that German exports have risen, increasing to hit a new record of 4.3 million passenger vehicles. Moreover, German auto exports ended 2007 on a high note with car exports jumping 9 per cent in December, the VDA said. Foreign orders were up 7 per cent.
