Dozens of people, including children, were injured after a man driving a Mercedes Benz intentionally drove his vehicle into a crowded parade in Germany, according to local news reports Monday.

The driver of the car has been arrested, according to police, and local reports have said small children are among the injured people at the scene in Volkmarsen, about 280 km southwest of Berlin.

Local media has cited witnesses who said the driver appeared to deliberately crash his car into the crowd, but police initially declined to say if it was an accident or a deliberate attack.

The incident occurred during "Rosenmontagszug", a German carnival parade which takes place in cities across the country on the Monday before Ash Wednesday.

It comes less than a week after a gunman shot down 9 people in one of the worst racist attacks in Germany since World War II.

"Regardless of whether it is a medical emergency or a technical failure or if at worst there is intention behind it, we cannot say anything about it," a police spokesperson told the dpa news agency on Monday afternoon.