BMW Forecasts Another Record-Breaking Year

Luxury-car maker BMW AG on Monday looked back on another record year, and presented an upbeat outlook for the year to come, despite the current market difficulties.

"We're expecting the company to continue along the current growth path," said BMW's outgoing chief executive, Joachim Milberg.

Analysts noted that the car maker's sales figure for 2001 showed that the final quarter of the year brought a slowdown in growth.

But 2001 still emerged as the best year in the company's history, with full-year sales of 37.85 billion euros, up 7.1% on the year.

Unit sales rose 10% to 905,657. The group's medium-term aim is to lift its annual vehicles sales to 1.2 million.

Despite the sale of Rover, revenue from the sale of cars rose 13% to 33.5 billion euros.

The loss-making U.K. unit had contributed 3.9 billion euros to the 2000 sales revenue of 29.6 billion euros. Sales revenue from motor cycles rose 14% to 1.06 billion euros.

Earnings figures will not be presented until 19 March, but BMW said its profit figures would also show a year-on-year improvement, with return on sales "clearly above 6%".

HypoVereinsbank analyst Georg Stürzer estimates that the final figure for return on sales will be 7%.

But he's not expecting 2002 to bring a further improvement, saying high investments in new models and in the construction of a plant in the eastern German city of Leipzig would weigh on the result.

In 2001, BMW's investments came in at 2.8 billion euros, some 33% up on the year.

Among the major projects here was an almost twofold increase in production capacity for the X5 sports utility vehicle at the plant in Spartanburg in the United States.

nother area where capacity has been raised – by 25% – is at the plant in the British city of Oxford, where the new Mini is assembled.

Since summer 2001, just over 42,000 of the small cars have been assembled, and the increase in capacity to an annual output of 125,000 is aimed at meeting the strong demand.

BMW said it's satisfied with the market response to its new flagship, the 7 series, whose design has made it the subject of some controversy.

ome 3,000 of the 7 series have already been delivered since its market debut in November. BMW shares on Monday closed at 40.28 euros, up 4.65%.

It was helped in this respect by Morgan Stanley's decision to upgrade the stock toStrong Buy, its highest category.