FRANKFURT -- German luxury carmakers Porsche and BMW led European auto stocks higher on Wednesday after they said that new models had helped them sell more cars in the United States last month.
Porsche, BMW and DaimlerChrysler's Mercedes unit said their U.S. sales were higher in March than a year ago, with new products helping all three of them buck the trend of weaker demand in the world's largest car market.
U.S. auto sales overall fell for the third consecutive month in March, although the fall of just 0.4 percent to a seasonally adjusted annual rate of 16.2 million vehicles was less than expected amid Iraq war fears and economic uncertainty.
"U.S. auto sales were massively better than expected and fantastic results considering the war in Iraq," said one London-based analyst who declined to be named.
Relief that the U.S. market had held up relatively well boosted car stocks across Europe.
"Mercedes, BMW and Porsche all benefited from a positive base effect," said a Frankfurt-based autos analyst.
"Mercedes has gained from the fact that its E-Class saloon was being phased out in the U.S. this time last year, BMW from the Mini this year and Porsche from its Cayenne sports utility."
Porsche stock, which has underperformed the European market by 20 percent since the start of the year, was the sharpest gainer, racing up over seven percent after the new Cayenne helped lift U.S. unit sales by close to a quarter last month.
There had been concerns in the market that inventories of the Cayenne, Porsche's only four-door production car and its first foray away from sportscars, were building at U.S. dealers.
BMW's March U.S. sales rose 18.6 percent, boosted by sales of the group's iconic Mini hatchback, which was launched in the U.S. in late March 2002.
BMW said sales of its own-brand vehicles rose 4.5 percent to 20,611 vehicles, while Mini sales rose to 2,821 cars from 787 in March the previous year.
DaimlerChrysler stock was 2.8 percent higher at 27.48 euros, after its luxury unit Mercedes sold 1.8 percent more vehicles in the U.S. last month, helped by the recently updated E-Class mid-size saloon.
Volkswagen stock, which has fallen almost 14 percent since the start of the year, underperformed European peers but still managed to climb 1.6 percent after the company sold 17 percent fewer vehicles in the U.S. in March.
VW, which is suffering from a low point in its product cycle, sells around a fifth of its cars in the United States, but the weakness was widely expected. It has already warned that unfavorable exchange rates and weak markets on both sides of the Atlantic will mean profits will fall this year.
Chief Executive Bernd Pischetsrieder said the company was sticking to its target of lifting unit sales back over five million this year, from 4.98 million in 2002, despite the weaker U.S. result.
Although exports have long been supporting production levels for German carmakers grappling with weak demand at home, the trend could soon start to give way, according to the VDA industry lobby group.
The VDA said on Wednesday orders for the German industry as a whole had slipped in March to below February's levels and that ongoing weakness in the U.S. meant carmakers may have to scale back production.
"Orders at the level seen in February were undoubtedly an exception. March will certainly bring us back to reality," VDA President Bernd Gottschalk said at a conference in Wolfsburg, VW's home town. He gave no precise figures.
Gottschalk said German car production rose seven percent in the first two months of the year, mainly due to strong exports, but added that the U.S. market was showing signs of weakness with high inventory levels.