FRANKFURT - First quarter sales rose 12.5 percent as consumers rushed to beat the 1 percent rise in the value-added tax on 1 April.
The tax is now 16 percent. Sales were also boosted by improved availability of new models.
March set a new record for German registrations.
Carmakers made 35-50 percent of the quarter's sales in one month. Analysts expect sales to fall in April and May.
'It would be a mistake to see the positive results in the first few months as indicating strong sales for the rest of the year,' said analyst Peter Schmidt of the research firm Automotive Industry Data. 'The market is not as strong as it appears. Except for the very successful new models, most cars can only be sold with incentives and price cuts.'
Volkswagen Group remained the market leader with a 27 percent share in the quarter as sales increased 18.4 percent.
General Motors had a 14.8 percent share, and Ford 11.0 percent. Sales at No. 4 Mercedes-Benz rose 26.9 percent as deliveries of the A-class and SLK improved.
The VW Golf remained the top-selling model in the quarter, followed by the GM Astra, Ford Fiesta, Mercedes C-class and Audi A4.
Sales of VW's Polo supermini were down 11 percent to 31,310, compared with the same period in 1997.