It fears the plans could increase the amount of tax paid by some drivers by as much as 50% and is checking whether the suggested increase, which could come into force from March unless derailed by the opposition, is allowed by law.
Association executives say the minister-presidents of the German states of Lower Saxony and Bavaria have already voiced opposition to the plans.
VDA president Professor Bernd Gottschalk said: 'The plans for the drastic increase in this tax are already having disastrous effects on the mood of purchasers and the demand for cars.
'Many members of staff and companies have already reacted as if the matter has been decided. In November and December 2002, orders for company cars were already down by 17% and 22% respectively.'
Gottschalk claimed the tax hike punished the craft trades, fitters and representatives and labelled it 'extremely antisocial'.
He added: 'This is not about vehicles driven by chauffeurs in white gloves, but about real people in overalls. Nothing can justify this 50% tax rise. Neither mileage nor the amount of private use has increased.'