BMW motors ahead despite strong euro
AFP · 18 Mar 2008, 11:35
Published: 18 Mar 2008 11:35 GMT+01:00
The group "again faces some major challenges in the current year as a result of the strong euro, a weaker US economy and continuing high raw material prices," the company said in a statement.
Pre-tax profit should nonetheless grow, excluding exceptional items, and sales were expected to exceed the record 2007 level of 1.5 million vehicles, chief executive Norbert Reithofer told a press conference.
Last week, BMW announced that it had met its 2007 targets, with net profit of €3.13 billion, a sharp gain that was boosted by German tax reforms. Pre-tax profit however was down 6.1 percent to €3.87 billion after the 2006 figure got an exceptional boost of €372 million from the settlement of a convertible bond operation backed by shares in British jet engine maker Rolls Royce.
BMW has suffered from the euro's rise to record highs against the dollar and it booked a foreign exchange charge of €517 million last year following one of €666 million in 2006. It is said to be the most exposed auto manufacturer to currency fluctuations because the United States is its biggest export market.
"BMW is the most successful European (auto) manufacturer in the American market," Reithover said Tuesday. "That is why the dollar's persistent weakness hits us harder than competitors."
On Tuesday, the company also announced a new share buy-back programme that could cover as much as 10 percent of its equity. It must be approved by a general assembly of shareholders.
Like German rivals Daimler and Volkswagen, BMW has made the development of cleaner, environmentally friendly cars a top priority.
"Electric motors are an option for us," Reithofer said. "We will make a decision this year."
The company must offer by 2012 a vehicle that emits no carbon dioxide to maintain its official rating as a "large vehicle manufacturer" in the US market.