New car sales in Germany nosedived in January as virus restrictions and the end of a VAT sales tax reduction stifled demand, official data showed Wednesday.
A total of 169,754 new cars were registered last month in Europe’s largest car market down 31 percent on January 2020, the KBA transport authority said.
The plunge was caused by “car dealerships being closed due to the pandemic and the VAT rate,” according to the German Automobile Association (VDA).
The German government had reduced VAT for six months from July to stimulate spending during the virus outbreak, with the new year seeing a return to the higher rate of 19 percent.