New government subsidies for people who scrap their old cars for new ones will help minimise an expected fall in auto sales in Germany this year despite very tough market conditions, industry association VDA said.



VDA President Matthias Wissmann said on Wednesday the government steps - part of a 50 billion euro ($64 billion) stimulus package - meant Germany could see about 3 million newly registered cars this year, down from almost 3.1 million last year.



In December, before the new steps were announced, the VDA had forecast about 2.9 million new registrations in Germany in 2009.



'A ray of light is that, due to new measures from Germany's government, we are getting new orders,' Wissmann told reporters.



In an effort to help Europe's biggest economy weather what is set to be its deepest recession since World War Two, the government has promised to help the auto sector, on which about one in five German jobs directly or indirectly depends.



Consumers trading in cars that are at least nine years old to buy a more fuel-efficient vehicle can get a 2,500 euros bonus for automobiles registered by the end of 2009.



A new car tax system based on emissions is also taking effect. In total, the support is worth about 1.5 billion euros,according to the German government.



Metzler Equities analyst Juergen Pieper said the VDA's projection of 3 million registrations was optimistic but achievable.



'Around 3 million is at the upper end of what's realistic. It's not an illusion.' he said, adding that his own forecast was for 2.6 million without the support package and 2.9 million including the measures, with 2.85-3.00 million a reasonable range.



'Since the middle of January, demand (for new cars) has risen significantly,' said Wissmann. 'These are the first encouraging signals for a stabilisation of the domestic automarket which is still very difficult.'