Demand for cars in Europe's biggest market has risen by four per cent according to industry group VDA.

New car registrations in Germany rose to 277,000 vehicles in September, bringing the total over the first nine months of the year in to line with the previous year's total.

Some analysts are now predicting that the much-vaunted recovery may finally be taking hold in Western Europe.

HVB auto analyst Georg Stuerzer was one, arguing that the figures 'show that the German market is finding its feet again'.

However, VDA president Bernd Gottschalk warned against over optimism, warning that 'one should not derive any sort of euphoria about an upturn from it.'

Mr Gottschalk says he believes the upturn in Europe's biggest car market will happen next year, ending nearly four years of decline.

At present he believes this year's figure for new registrations will remain around the 3.25 million mark, the same level as in 2002.