Reuters reported that DaimlerChrysler's Mercedes-Benz unit said on Tuesday it expected flat sales in 2004 compared with this year but that new models would lift sales in 2005.

"We expect the same volumes in 2004. This has several reasons... but 2005 would be where we have full capacity of the A-class and M-class variants and that would give us the chance to increase volumes significantly," Mercedes chief Juergen Hubbert told Reuters at the Frankfurt motor show.

Both the small A-class and the offroad M-class are due to be revised next year, dampening sales as customers wait for new models, Reuters noted.

According to the report, Hubbert added Mercedes was still on track for flat sales, revenues and profits this year and he expected the European car market overall to grow by about 2.5% next year.