FRANKFURT: Registrations of new cars in Germany jumped by 30 percent in July, the auto industry federation VDA said Tuesday, in large part owing to a state subsidy that will run out at the end of the year.

Europe's biggest car market "stabilised further," a VDA statement said, with the registration of 340,000 new vehicles.

Since the beginning of the year, German auto dealers have sold 2.4 million vehicles, or 27 percent more than in the first seven months of 2008.

"This trend, along with orders for 487,000 vehicles, give us confidence," VDA president Matthias Wissmann was quoted by the statement as saying.

A government subsidy of 2,500 euros (3,600 dollars) for drivers that scrap old cars and buy new ones has boosted sales of small cars in Germany, while similar programmes in other countries have helped limit a collapse in exports.

The export of German cars still declined by 12 percent in July, VDA's figures showed, but that was comparatively better than the seven month drop of 31 percent from the same period in 2008.

German auto production slipped by five percent in July from the same month a year earlier, and by 21 percent in the period from January to July, VDA said.

Last week, Volkswagen, the biggest European carmaker, posted second quarter net profit of of 283 million euros that was 83 percent less than in the second quarter of 2008.