SALES of new cars in the important German car market are continuing to improve after a poor start to the year.

Automotive forecaster JD Power-LMC said the sales rate in Germany, at first estimates more than 3.4 million units a year in October, marked a further improvement on gains already made so far this year.

The company said: 'Consumer confidence continued to improve in October and, as with seasonally-adjusted annualised car sales, notched up the strongest reading for a year.

'There remain obstacles to growth in this key market, such as the high level of unemployment but, with positive economic signals coming from the broader economy, there is room for optimism.'

For Europe overall, the company said sales had stabilised and were set to reach 14.8 million units a year.