BMW is sticking to its cost-cutting goals, despite the current financial challenges facing suppliers.

The company is aiming to cut EUR4bn from its purchasing bill by 2012.

"We are making good progress and are on schedule so far - I am am sure that we will deliver the EUR4bn," head of purchasing Herbert Diess told Handelsblatt newspaper.

Because of cost pressures, suppliers have been shifting their operations to eastern Europe. However, there is a shortage of qualified labour there which means they are now starting to look at even lower cost countries such as North Africa. Diess said that labour shortages are not a problem there.