Germany's conservatives swept to victory in Sunday's elections, with their leader Friedrich Merz set to become the next chancellor, followed by the Alternative for Germany (AfD) in second place after record gains.

Merz urged the speedy formation of a new coalition government, warning that as US President Donald Trump was driving rapid and disruptive changes, "the world isn't waiting for us".

He stressed that – after Trump reached out to Russia and made comments fuelling doubts about the future strength of NATO – Europe must boost its defence capabilities and said that he has "no illusions at all about what is coming out of America".

The AfD almost doubled its score to over 20 percent, boosted by fears over immigration and security after a spate of deadly attacks blamed on asylum seekers.

Merz's CDU/CSU alliance won more than 28 percent, according to projections at 2000 GMT, crushing the Social Democrats (SPD) of outgoing Chancellor Olaf Scholz, which were looking at a historic low of 16 percent.

Merz – a long-time party rival of ex-chancellor Angela Merkel – has vowed a crackdown on irregular immigration. He hopes to win back votes from the AfD whose rise has stunned many in the country.

For now, the AfD, basking in the vocal support of key Trump allies, is set to stay in opposition. All other parties have vowed to keep it out of power and behind a "firewall" of non-cooperation.

But its jubilant leader Alice Weidel hailed the "historic" result and again said her party was ready to govern with the CDU/CSU.

Before Merz, 69, takes over, he will have to forge a new coalition government in Europe's top economy, an often drawn-out process he has vowed to complete by Easter. (AFP)