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European car sales fall, led by Renault, BMW, Daimler

European new car sales fell 2.5% in February, led by declines at Renault SA, Bayerische Motoren Werke AG and DaimlerChrysler AG as German demand plunged.

Sales dropped to 1.08 million vehicles from 1.11 million units a year earlier, the Brussels-based European Automobile Manufacturers Association said today in a statement. Two-month sales declined 0.3% to 2.4 million vehicles. Four of the top five markets posted declines, led by Germany, Europe's largest economy, where sales plummeted 15% with the introduction January 1 of an increase in the sales tax to 19% from 16%. Sales at Renault SA, Bayerische Motoren Werke AG, DaimlerChrysler AG slumped as models aged and the carmakers prepared new vehicles, including the latest Mercedes C-Class. „For both DaimlerChrysler and BMW, the launch of the new C-Class from Mercedes hit sales of the outgoing model and its chief rival BMW's 3-Series,” Stephen Pope, head of equity research at Cantor Fitzgerald in London, said. „Renault has been struggling with an aging model lineup for several months now.”

Renault, France's second-biggest carmaker, declined 12% to 96,215 vehicles as demand in Europe slumped for models such as the Clio subcompact and Megane compact cars. CEO Carlos Ghosn said last month the company would report an operating profit equal to 3% of sales this year, from 2.6% last year, as sales rise in the second half with new versions of the Twingo small car and Laguna midsized model.

BMW and DaimlerChrysler's February sales were hurt by the plunge in their German home market. BMW, the world's biggest luxury carmaker, fell 9.9% to 45,722 units and DaimlerChrysler, the world's fifth-largest carmaker, fell 7.5% to 53,599 vehicles. BMW CEO Norbert Reithofer said yesterday that he expects pretax profit to rise in 2007 for the second year in a row, helped by sales of new versions of sport-utility vehicles, the Mini small car and 1-Series model. DaimlerChrysler's Mercedes-Benz began selling the new C-Class this month.

Toyota Motor Corp., Fiat SpA, Ford Motor Co. and Volkswagen AG bucked the downward market trend, posting gains as new models attracted customers. Toyota's European sales last month surged 13% to 68,040 vehicles, with its market share gaining to 6.3% from 5.4% a year earlier, as new versions of the RAV4 sport-utility vehicle and Yaris small car attracted buyers. The Toyota City, Japan-based carmaker in September said it expects to sell 1.3 million vehicles annually in Europe by 2008. Toyota, the world's second-largest carmaker, aims to sell 4% more vehicles this year, potentially surpassing General Motors Corp. as the world's largest carmaker, with popular models such as the Camry and Prius cars. GM's European sales last month dropped 1.2% to 109,281 vehicles, led by an 11% slump at the Saab unit.

Fiat boosted sales 6.5% to 101,747 vehicles, while market share rose to 8.9% from 8.4% on demand for the Grande Punto. Fiat also began selling the Bravo compact model last month. Fiat „definitely attracted an important part of the market thanks to its new models and marketing strategy,” Alessandro Capuano, a trader with IG Markets in London, said. „It continues to rebuild its market share and it seems like the new Bravo could be a success.” An improvement at Fiat's premium brands, including Alfa Romeo, Maserati and Ferrari, have helped Fiat's profit. The Alfa Romeo 159 sedan, introduced at the end of 2005, boosted the unit's February sales 5.7%. The luxury divisions are strengthening ties with each other by sharing components and sales networks.
Ford, the world's third-largest carmaker, sold 4.5% more vehicles in February. Sales of its Volvo brand surged 16% to 18,838 units, while the main Ford brand rose 3.1% to 85,868 vehicles.

Sales at Volkswagen, Europe's largest carmaker, gained 1.4% to 212,916 vehicles, as the German company's Czech unit Skoda Auto AS gained 17%. Audi, the carmaker's luxury brand, rose 8.2%. Sales at the namesake Volkswagen brand slumped 5.9%. CEO Martin Winterkorn said last month that 2007 would be a „difficult” year for the Volkswagen brand, which has no major product introductions until next year.

PSA Peugeot Citroen, Europe's second-largest carmaker, posted a sales decline of 4.9% last month to 156,107 units. Recently appointed CEO Christian Streiff plans to increase profit after a €127 million ($167 million) second-half loss. (Bloomberg)