EUROPE’S economy expanded less than economists forecast in the fourth quarter as cold weather curbed German output and French growth unexpectedly stalled.

GERMAN stocks dropped yesterday, led by BASF and Bayerische Motoren Werke (BMW) after the companies said third-quarter profit declined.

Volkswagen , Bayerische Motoren Werke and other car makers are set to benefit from increasing demand in Europe this year following a rise in March sales as tax cuts and new models spur consumer spending.

Bayerische Motoren Werke (BMW), the German luxury carmaker, said revenue fell by more than 2% last year due to the strength of the euro against the dollar.

Bayerische Motoren Werke (BMW) AG has long-term plans to double production from its US operations from 120,000 units last year, possibly after five years, a company source said.