European Automakers' U.S. Sales Fall as Luxury Buyers Rein In

European automakers' U.S. sales fell 1.2 percent in March, the third consecutive monthly decline, as recession-wary consumers shied away from luxury vehicles.

Sports-car maker Porsche SE had the biggest drop, 25 percent from a year earlier. Sales fell 5.4 percent at Bayerische Motoren Werke AG, the largest seller of luxury autos in the U.S., and 3.7 percent at Daimler AG's Mercedes-Benz. Volkswagen AG's namesake brand rose 13 percent, while its Audi sales slid 0.4 percent.

With record high gasoline prices and consumer sentiment at the lowest in 16 years, industrywide U.S. sales of cars and light trucks dropped 12 percent, according to Bloomberg data. The market is ``gripped by recession fears,'' Porsche said.

Makers of luxury vehicles ``are not completely immune,'' said Tom Libby, an automotive analyst at J.D. Power & Associates in Troy, Michigan. ``It is significant that a high-end brand like Porsche is down by so much.''

The March decline for the 16 European brands, to 97,743 cars and light trucks, came as sales skidded 19 percent at General Motors Corp. and 10 percent at Toyota Motor Corp. The Europeans fell 9.8 percent in January and 4.9 percent in February and were down 3.4 percent for the quarter, according to Autodata Corp.

The March drop at Stuttgart, Germany-based Porsche included a 43 percent plunge for its 911 line of sports cars. Sales of its Cayenne sport-utility vehicle rose 33 percent.

Porsche Chief Executive Officer Wendelin Wiedeking had said he was reducing North American inventory in anticipation of slumping sales.

BMW

BMW sold 27,404 vehicles last month, with a decline of 8.7 percent to 23,115 for the namesake brand and a 17 percent increase to 4,289 for the Mini brand, the Munich-based company said in a statement.

Sales of BMWs have softened in major markets such as California and Florida because of a weakened real estate market, said Tom Purves, chairman of BMW North America, in a March 19 interview in New York. He said the company's U.S. sales are being hurt by short supply, which may continue until midyear.

The Mini brand benefited from its new Clubman model, a slightly larger version of its small sports car.

Volkswagen, Europe's largest automaker, reported sales at its namesake brand of 19,587 vehicles, an increase from 17,355 a year earlier, with gains of 20 percent for the Jetta sedan and 17 percent for the Eos small convertible.

The Wolfsburg, Germany-based automaker is introducing five new models this year and has set a sales goal of 800,000 vehicles in the U.S. by 2018, after reaching 230,600 last year.

Volkswagen's Audi luxury-vehicle division's sales decreased to 7,987 from 8,020. Audi, based in Ingolstadt, Germany, posted declines of 32 percent for the Q7 sport-utility vehicle and 25 percent for the A3 sport compact.

Daimler's Mercedes sales fell to 20,808 from 21,612, the Stuttgart-based company said in a statement. Its E-Class models declined 24 percent. Mercedes reported a 50 percent gain for its entry-level C-Class line.

Daimler also said its Smart USA unit sold 1,734 of its two- seat cars, which went on sale in the U.S. in mid-January.

SOURCE: BLOOMBERG.COM, APRIL 2, 2008