The country's carmakers have managed to outpace the market, expanding sales by 75 percent since the financial crisis pushed US sales to the lowest level in decades in 2009.
"During those crisis years we, the German auto industry, did not make the mistake of underestimating the importance of the US market," VDA's president Matthias Wissmann said at the Detroit auto show. "On the contrary, our companies consistently expanded their activities here in the United States. This long-term strategy is paying off."
German automakers set a sales record of 1.3 million vehicles in 2013, a five percent increase over 2012. The gains mean that one in eight passenger cars sold in the United States bore a German badge.
German dominance of the luxury market - which could expand to 11 or 12 percent of total US sales in 2014 from about 10 percent in 2013 - will translate into even further gains as the overall market is forecast to expand another three percent to 16 million vehicles, Wissmann said.
"As the American market rebounds, buyers go big," Wissmann said, quoting a recent newspaper headline. "We are confident the premium market will dominate."
Volkswagen, meanwhile, plans to fill a big hole in its US portfolio by launching a mid-sized sport utility vehicle in 2016 and will expand its manufacturing presence in the region, the German automaker said on Sunday.
The new seven-seater is part of a $7 billion investment in North American operations over the next five years, VW chief Martin Winterkorn said at a reception held on the eve of the Detroit auto show.
"The US is a cornerstone of our 2018 strategy," Winterkorn told reporters.
"We have set our goal: Volkswagen group of America aims to sell one million Volkswagen and Audi cars per year in the US by 2018," he added. "We are taking up the challenge with confidence, total commitment and the necessary staying power."
The largest European automaker had previously announced plans to invest $5 billion by 2015. Winterkorn did not specify how the additional funds will be spent.
The VW group , which also includes the Audi, Porsche, Bentley, Bugatti and Lamborghini brands, has managed to nearly double its US sales since 2008, setting a new record of 611,700 delivers in 2013.
But sales of the Volkswagen brand fell 6.9 percent in 2013 even as the market as a whole grew 7.6 percent. That led the overall automotive group's sales to trail the market, growing just 2.6 percent.
Analysts have cited the lack of a midsize sport utility as one of the reasons for the brand's failure to compete.
VW recently appointed Michael Horn as its new head of Volkswagen Group of America and Winterkorn expressed confidence in his ability to get the region back on track.
"We have a solid base to move on," he said of Horn.
Meanwhile their rival German carmaker BMW said on Monday it sold more cars than ever before in 2013 and it aims to top that number again this year.
BMW said in a statement it sold a total 1.964 million vehicles last year which was an increase of 6.4 percent from the previous record year of 2012.
The group owns three brands, BMW, Mini and Rolls-Royce and also manufactures motorbikes. Global sales of the BMW brand alone rose by 7.5 percent to €1.655 billion.
BMW also sold a total 305,030 Minis worldwide and Rolls-Royce sales were up 1.5 percent at 3,630. Motorcycle sales increased by 8.3 percent to 115,215 units.
"The BMW group posted record sales once again in 2013," said sales and marketing chief Ian Robertson.
"Despite the prevailing headwinds in many markets, we aim to increase sales and make 2014 another record year," he said.