UPDATE 1-German car market sees another monthly plunge

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Fri Jul 2, 2010 9:26am BST

* German new car registrations in June down 30 pct -source

* Daimler CEO sees record sales month in June

* Daimler to sell more than 100,000 cars in China in 2010

(Adds Daimler comments, background)

HAMBURG/MUNICH, July 2 (Reuters) - The German car market, Europe's largest, plunged as expected in June as the aftershocks from last year's clunker scrapping scheme are forecast to continue haunting the industry throughout the rest of this year.

An industry source told Reuters on Friday that registrations of new cars, which lag sales slightly, fell by about 30 percent last month and about 25-27 percent year to date.

The second half would "more likely be better than the first," the person added, but confirmed that the drop would still be significant in 2010 overall.

Volume carmakers like Volkswagen (VOWG_p.DE) and Fiat (FIA.MI) enjoyed a bonanza last year, after the government greased new car purchases with a 5 billion euro ($6.12 billion) fleet renewal incentive financed using taxpayer money.

The scheme inflated demand by an estimated 1 million vehicles, proving so successful that it later formed the blueprint for clunker programmes in a host of other countries including the United States. [nLDE6600S2]

Although heavily dependent on their domestic market, German auto executives have been largely relaxed about this year's slump since a recovery in other markets coinciding with an outright boom in China have ensured assembly lines are running.

The depreciation in the euro versus key currencies like the dollar, pound and yen is also expected to help spur already buoyant exports.

Some three out of every four cars built in Germany are sold abroad.

Premium carmakers Daimler (DAIGn.DE), BMW (BMWG.DE) and VW's Audi all have shown a relative immunity to the slump in domestic sales, since they mainly affect the affordable subcompact segment.

Daimler Chief Executive Dieter Zetsche told a conference in Munich that June could be a record sales month for his Mercedes-Benz passenger car business. [nWEA8313]

(Reporting by Jan Schwartz and Jens Hack; Writing by Christiaan Hetzner)

((christiaan.hetzner@thomsonreuters.com; Reuters Messaging: christiaan.hetzner.reuters.com@reuters.net; +49 69 7565 1249))

($1=.8172 Euro) Keywords: AUTOS GERMANY/

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