DETROIT - Whether it was a U.S. backlash against Germany's opposition to the Iraq war or competitive pressures, the top German automakers suffered their first combined fall in U.S. auto sales in April since December 2001.
BMW AG, the Mercedes arm of DaimlerChrysler AG, and Volkswagen AG all lost U.S. market share in April.
All three German automakers said they have received a small number of letters and e-mails from Americans upset with Germany's opposition to the war with Iraq.
However, officials with the automakers and industry analysts said lower sales could be due to the weaker U.S. dollar against the euro, which makes German vehicles more expensive in the United States.
Until April, BMW and Mercedes had been two of the fastest growing luxury brands in the United States. But last month, while nearly every other luxury brand reported stronger vehicle sales, BMW and Mercedes both lost market share.
BMW's U.S. sales, adjusted for an extra sales day in April, fell 10 percent to 24,131 units, despite a jump in sales of its Mini small car. The drop broke BMW's 15-month streak of stronger sales.
Mercedes sales fell for the first time since last October, dropping 6.8 percent, while sales for Volkswagen and its Audi luxury brand also fell.
"As far as the attitude about German products, we've received a few letters and e-mails, but not as many as some people might think. I would say about 50 or 60," said VW spokesman Tony Fouladpour.
Edmunds.com, a leading web site for car research, said that the number of people checking German-brand vehicles fell from March to April.
German companies took the threat of a U.S. boycott seriously enough that a German-U.S. group called Atlantic-Bruecke (which translates as Atlantic bridge) placed an ad in the New York Times in February stressing the bonds between the two countries. Several top auto executives signed the ad, including DaimlerChrysler chief Juergen Schrempp and Jens Neumann, the Volkswagen board member responsible for North America.
But rather than a backlash, Fouladpour and industry analysts suggested that the German automakers were hit by the stronger euro, which has strengthened by about 7 percent against the U.S. dollar since the beginning of the year.
A stronger euro against the dollar forces German automakers to cut prices or face weaker sales in the United States.
"That could be making it more difficult for the Europeans to compete, particularly against the big incentives," said Bob Schnorbus, chief economist with J.D. Power and Associates.
Indeed, both VW and BMW are expected to report a significant drop in first quarter earnings later this week. DaimlerChrysler AG said last month that it expects flat profits for its Mercedes division this year.
While a backlash due to the Iraq war could be short-lived, some analysts suggested the weaker dollar could be a longer-term problem for the German automakers.
Paul Taylor, chief economist with the National Automobile Dealers Association, noted that German automakers, in particular VW, gained U.S. market share over the past decade when the U.S. dollar strengthened against the German mark, and subsequently the euro.
"The growth in Volkswagen market share clearly stopped when the dollar weakened," Taylor said. "We are likely to see VW market share fall as the dollar weakens (further)."