A 37-year-old woman and her 2-year-old daughter died from injuries they sustained when an Afghan national drove a car into a crowd in Munich on Thursday, German police say, the first fatalities from the incident.

Prosecutors had said previously that at least 39 people were injured, some of them critically, when the car ploughed into trade union activists demonstrating for higher pay.

Authorities said they were treating the incident as a religiously motivated attack.

The attack has brought security issues back into focus in campaigning for Germany's federal election on February 23.

Police search a car after it was driven into a crowd in Munich. – Reuters

The attack also came hours before the arrival of international leaders in the southern German city for the annual Munich Security Conference.

German Chancellor Olaf Scholz visited the site of the car ramming attack, and said the man cannot hope for leniency and must leave the country after serving his sentence.

"Such things should not happen and that is why it must always be very clear that anyone who does something like that must expect the harshest punishment," Scholz said.

"And of course, if he doesn't have a right of residence, he also has to leave the country at the end of his sentence.”

"We must all stand together now, ensure that our country sticks together and that the very values ​​that those who peacefully held a rally and marched here represent, united with those who helped here, namely that we are together as human beings and those who commit such acts must always expect that we will act against them with the utmost severity."