Stuttgart  - Sales of Mercedes-Benz and BMW cars tumbled in March as buyers around the world continued to avoid premium cars, data from the two German manufacturers showed Tuesday.

However, there were some signs of recovery.

Mercedes-Benz sales were down 18 per cent in year-on-year terms to 98,500 cars, carmaker Daimler said in Stuttgart. But it noted that this had been a less steep drop than than the 28 per cent it suffered in February or the slump of nearly one third in January.

World sales of BMW, Rolls-Royce and Mini cars in March were down 17 per cent in annual terms to 126,375 cars, BMW Group said in Munich.

BMW chief sales and marketing officer Ian Robertson said the fall had been less extreme than in the previous two months, with some encouraging signs on key markets such as Germany and the United States, "but it is too early to say it has bottomed out."

At Daimler, car sales including the Smart and Maybach brands totalled 110,400.

In the first three months of the year, Smart sales were down a scant 0.5 per cent to 28,800 cars as the brand was helped by government subsidies in Germany to buyers who trade in old cars. In Germany, Smart sales soared 25 per cent.

Chief executive Dieter Zetsche has indicated Daimler may make a loss in the first quarter. At most of its German factories, many workers have had to accept furloughs to keep their jobs.

Daimler also hailed sales growth in China, where it sold 5,400 cars in March, up 42 per cent annually, after scoring a boost of 17 per cent in February. US sales declined 23 per cent to 17,300.(dpa)