Germany has so far been able to ride out Europe's growing debt crisis, but industry association VDA warned on Tuesday that that trend will come to an end next year.
At an event held in Berlin earlier on Tuesday, VDA forecasted that new car registrations in Germany will dip 3.2 percent to about 3 million vehicles in 2013. Earlier this year VDA estimated that 3.1 million vehicles would be sold in Germany in 2013.
If VDA's prediction comes true, it would mark Germany's second-worst year of car sales since 1991. The country's 3 million projected sales would rank just ahead of the 2.92 million vehicles sold in Germany in 2010.
"We must brace for the difficult situation in the euro zone to persist in 2013," VDA president Matthias Wissmann told Reuters. "That's why we're keeping to a subdued forecast."
Although several European countries have seen double-digit sales drops this year, Germany's robust economy has propped up the auto industry. Whereas France's car sales are expected to decline by as much as 15 percent this year, Germany is on pace for just a 2 percent sales decline.
Despite the expected drop in sales, German car production is predicted to inch up 1 percent to 5.4 million units next year.