BERLIN (REUTERS) - A 73-year-old German man died in hospital after being seriously injured when a man drove into a crowd outside a bakery in the southwestern town of Heidelberg on Saturday (Feb 25), police and prosecutors said in a joint statement.

Police said the two people other people who were injured - a 32-year-old Austrian man and a 29-year-old woman from Bosnia and Herzegovina - received hospital treatment but were later discharged.

A police spokesman said there were no signs that it was a terrorist attack.

"There are no indications of a terrorist background,"spokesman David Faulhaber said, adding that he could not comment on the possible motives for the attack.

The suspect was seen getting out of the car with a knife and was later tracked down to near a swimming pool.

He is now in a hospital in Heidelberg having been shot by police while being arrested, leaving him seriously injured, police said.

Regional newspaper Rhein-Neckar-Zeitung said he was not fit to be questioned.

Investigations by the public prosecutors' office in Heidelberg and the town's criminal police were continuing, police said.

Rhein-Neckar-Zeitung cited police as saying the suspect was a young German man.

The newspaper said the suspect had stopped at a red traffic light and when it turned green put his foot down before hitting the group of people at high speed and smashing into a pillar.

The German authorities are on high alert after a failed Tunisian asylum-seeker drove a truck into a Christmas market in Berlin on Dec 19, killing 12 people.