Quelle teamed up with auto dealers a year ago to start selling cars.
"We discovered that our co-operation with German dealers was productive, successful and long-lasting," says Heiko Eich of KarstadtQuelle Mobil Service.
He said the company is now negotiating to sell Volkswagen, Opel and Ford models.
Eich said Quelle is not looking for co-operation with medium-sized and privately owned businesses that are successful in their local regions and now want to sell cars all over Germany.
Quelle currently offers new car buyers discounts of up to 22 percent on list prices.
Eich said Quelle is selling hundreds of cars every month, but declined to give more detailed figures.
The KarstadtQuelle Group, one of Europe's biggest retail groups, plans to increase all of its trading activities following losses of 388 million euros during the first half of 2004.
Eich said that the auto sales business would make a "strategically important contribution" to the group's future plans.