Germany's new car market grew by 21 percent in September and orders fell a less-than-feared 12 percent even as a scrappage scheme for old autos ran out of money, the VDA vehicle manufacturers association said on Friday.

Around 316,000 new cars were registered in Europe's biggest auto market last month, bringing the total in the first three quarters to nearly three million, a gain of 26 percent.

VDA said worries were overblown that domestic demand would fall off a cliff now that a program offering motorists 2,500 euros ($3,634) to scrap old cars and buy new ones has ended.

Automakers' orders on hand stood at 471,200 units in September, up 31 percent from a year earlier, guaranteeing that registrations would remain high for the rest of the year.

The German data follow news that U.S. auto sales tumbled last month after the government-funded cash for clunkers program ended.

VDA President Matthias Wissmann noted that U.S. sales by German car brands fell only 3 percent in September.

It is still too early to declare the crisis over, but there are signs of a tangible stabilization on foreign markets after a year (of a slump), Wissmann said.

German manufacturers will take part in this very early because of their global presence, he added.

The 5 billion euro German scheme to scrap cars at least nine years old ran out of money on September 2 but will continue to have an impact on car registrations for months as cars that were ordered under the scheme get delivered.

The VDIK association of foreign automakers raised its forecast for the 2009 German market to 3.7 million units from its previous outlook of 3.45 million. In 2008, new registrations stood at 3.1 million.

Official German new car registration data from the KBA motor vehicles agency are due out on Monday.

(Reporting by Jan Schwartz and Michael Shields)

Germany