BMW, Daimler drop below Toyota in Europe market

Bayerische Motoren Werke AG and Daimler AG, the world's top luxury-car makers, fell behind Toyota Motor Corp. in European deliveries in 2009 as government incentives failed to boost demand for their vehicles.

BMW and Daimler, the maker of Mercedes-Benz, dropped to eighth and ninth place in Europe, while Toyota, including the Lexus brand, rose to seventh, according to figures released today by the Brussels-based European Automobile Manufacturers' Association. BMW's namesake brand and Daimler's Mercedes-Benz marque also fell below Volkswagen AG's Audi.

Governments from Portugal to the U.K. to Romania offered consumers rebates for scrapping older vehicles in an effort to spur sales amid the global economic crisis. The payments largely benefited makers of small, fuel-efficient cars, helping Ford Motor Co., Renault SA and Fiat SpA gain market share.

Demand for BMW and Daimler may recover in 2010 because sales of their high-end cars weren't pulled forward by the scrapping programs, said Peter Kelly, senior director at J.D. Power & Associates in Oxford, England.

"Large and luxury car segments look set to begin to recover from the recession slowly but steadily as economic conditions improve," Kelly said. "Many of the strong performers in smaller cars in 2009 will see demand for their products crumble, at least for a while."

Stock Reaction

BMW declined 26 cents, or 0.8 percent, to 31.63 euros in German trading, while Daimler fell 61 cents, or 1.6 percent, to 36.49 euros. The Bloomberg EMEA Auto Manufacturers Index dropped 1.9 percent.

Car sales in the region jumped 16 percent in December to 1.07 million vehicles. The gain wasn't enough to erase declines for the year, as registrations slipped 1.6 percent to 14.5 million, the trade group said. Germany's 5 billion-euro ($7.2 billion) incentive program was the most successful, leading to a 23 percent surge in Europe's largest auto market.