Berlin  - Berlin's help for the German auto industry by offering a trade-in fee for new car purchases could see higher car sales this year, the German Car Industry Association (VDA) said Wednesday.

Instead of sales declining to 2.9 million this year, VDA chief Matthias Wissmann said he now expects auto sales to reach 3 million, after the government launched its plan to encourage passenger car owners to abandon their old models and buy new ones.

"I think with these new measures mean there is a chance that we can reach about 3 million," Wissmann said.

Car dealers across Germany have been using the 2,500-euro (3200- dollar) government subsidy to market their passenger vehicles, with Wissman describing the plan as "a bridge" to a possible pick up in the auto industry in 2010 or 2011.

But Wissman said that the government's bonus payment plan would not rescue the industry and that carmakers faced their "most difficult year since the Second World War."

Indeed, data released by the Brussels-based car industry umbrella group, the European Automobile Manufacturers' Association said sales of commercial vehicles in Europe plunged by 35.6 per cent in January.

However, the falls were even more dramatic in individual national European markets with registrations of light commercial vehicles plummeting by more than 80 per cent in Latvia and Ireland in January. (dpa)