BMW Hopes to Reach $4.7B in Pretax Profit

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The company, which held its annual general meeting in Munich, said it intends to reach the goal also by selling off a stake in engine maker Rolls-Royce Group PLC, which will provide a gain of about euro350 million (US$418.2 million).

"It's our target to reach pretax profit of euro4 billion in the current financial year," BMW Chief Executive Helmut Panke told reporters. Last year, the company reported a pretax profit of nearly euro3.3 billion (US$3.9 billion).

But Panke also warned that the company, like other automakers, faces higher costs for raw materials, including the steel needed to build its cars, as well as currency fluctuations.

He said those would "continue to have an impact on business development in the current year, however to a lesser degree than in the previous year." A weaker dollar hurts BMW because it exports key models such as its revamped 3-series to the United States from Europe.

The outlook came nearly a week after the automaker posted flat net profit for 2005 as rising costs and currency effects offset record sales of the German company's autos.

BMW earned euro2.24 billion (US$2.7 billion) last year, the same as in 2004 but better than analysts' expectations. Full-year revenue rose 5.2 percent to a record euro46.7 billion (US$55.8 billion) from euro44.3 billion in 2004.

BMW, helped by the revamp of its mainstay 3-series, sold more than 1.3 million cars in 2005. That was an increase of 9.9 percent on 2004, outstripping growth of 1.6 percent at its troubled rival Mercedes, part of DaimlerChrysler AG.

Shares of BMW were up nearly 4 percent to euro43.49 (US$51.96) in Frankfurt trading.