European Car Sales Fall for 3rd Month on Renault, GM (Update3)

European car sales fell for a third straight month in April, led by declines at Renault SA and General Motors Corp., as a sales tax increase weighed on demand in Germany. Fiat SpA and Toyota Motor Corp. gained market share.

Sales dropped 0.6 percent to 1.29 million vehicles from 1.3 million units a year earlier, the Brussels-based European Automobile Manufacturers Association said today in a statement. Four-month sales declined 0.2 percent to 5.52 million vehicles.

Demand in Germany, Europe's largest car market, dropped 7 percent as an increase in the sales tax to 19 percent from 16 percent at the beginning of the year discouraged buyers. Renault and DaimlerChrysler AG slumped as models aged and the carmakers prepared new vehicles, including DaimlerChrysler's revised Mercedes-Benz C-Class sedan and Renault's new subcompact Twingo.

``The German slowdown is lasting a little longer than expected,'' said Gian Primo Quagliano, research director at Bologna, Italy-based Promotor International SpA. ``The negative effect should be over by the end of the first half.''

GM sales declined 4.7 percent to 127,776 vehicles. Renault, France's second-biggest carmaker, posted a 10.5 percent drop to 121,215 units. Sales at DaimlerChrysler, the world's second biggest luxury carmaker, dropped 4.6 percent to 72,409 units.

Sales at Bayerische Motoren Werke AG, the world's largest maker of luxury cars, increased 2.6 percent to 64,020 cars as it introduced the new X5 sport-utility vehicle and the Mini at the end of last year. BMW will introduce the Mini Clubman and a new Rolls-Royce car this year.

Volkswagen Sales

Sales at Wolfsburg, Germany-based Volkswagen AG, Europe's largest carmaker, fell 0.2 percent to 261,989 vehicles. Audi, the carmaker's luxury brand, rose 7.8 percent. Sales at the namesake Volkswagen brand slumped 1.8 percent. PSA Peugeot Citroen, Europe's second-largest carmaker, posted a gain of 1.5 percent to 172,042 units.

Fiat, the region's fastest-growing carmaker in 2006, increased sales 8 percent to 106,110 vehicles on demand for the Grande Punto hatchback and Panda models. Fiat has gained a total of 6.8 percent this year and increased European sales 16 months in a row.

Car sales in Italy, Europe's second-biggest market, increased 9.6 percent in April as government tax incentives to substitute old, polluting cars with new models encouraged buyers.

Toyota's sales grew 1.3 percent to 75,577 units, gaining a total of 9.9 percent so far this year compared with 9.7 percent for all of last year. The Toyota City, Japan-based company passed General Motors in worldwide sales to become the biggest carmaker in the first quarter. GM has held the sales title for 76 years. Toyota's sales in Europe have been growing since February 2006.

Eastern Europe

Sales in the European Union's new members grew for a fourth consecutive month, jumping 13 percent to 95,676 cars.

Ford Motor Co., the world's third-largest carmaker, sold 2.4 percent more vehicles in Europe last month to 129,778 vehicles. Sales of its Volvo brand surged 9.1 percent to 22,012 units, while the main Ford brand rose 1.8 percent to 99,165 vehicles.