German carmaker BMW expects 2009 pretax profit despite lower revenue

BMW expects 2009 pretax profit despite lower sales

FRANKFURT — German carmaker BMW AG said Friday it expects to report a pretax profit for 2009, citing good cost control, despite lower revenue as the downturn cut demand for luxury cars.

BMW, the world’s biggest luxury carmaker, said it expects to report revenue of euro50.68 billion ($71 billion) for 2009, down 4.7 percent from euro53.2 billion in 2008.

“We are confident that the BMW Group will, as planned, be able to post a profit before tax for 2009,” Norbert Reithofer, the company’s chief executive said in a statement.

“This demonstrates that rigorous cost management and other wide-ranging measures to improve profitability … are taking effect.”

In 2008, the company posted a meager euro330 million in net income, a near 90 percent decline from 2008 levels.

BMW, based in Munich, is scheduled to report full earnings March 17.

The company said its cars business, which includes the Mini and Rolls Royce brands, sold nearly 1.3 million cars for the year, down 10.4 percent from 1.4 million in 2008. BMW said auto revenue for the year declined 10.3 percent to euro43.7 billion from nearly euro49 billion in 2008.

In terms of individual brands, BMW saw an 11 percent sales decline for the year, Mini saw a near 7 percent decline, while Rolls Royce saw a 17.3 percent decline.

BMW said its motorcycle division saw revenue decline 13 percent to euro1 billion from euro1.2 billion in 2008. In 2009 the company sold 87,306 motorcycles.

The company said the worldwide economic crisis will continue to have an impact on the automobile industry, but that BMW would “grow profitably” due to new models and an expected gradual global recovery. The company said it expects growth in especially the Chinese and U.S. markets during 2010.

“The BMW Group can start the new year with a certain amount of optimism,” Reithofer said.

“New models will provide a tail wind over the course of the year. We fully intend to remain the world’s leading provider of premium vehicles in 2010 and plan to increase sales within the single digit percentage range to over 1.3 million units.”

Shares of BMW were 2.4 percent higher at euro30.26 in Frankfurt morning trading.

On the Net:

www.bmwgroup.com .