Brilliance China Automotive Holdings has said it expects to post a "very satisfying" profit this year on strong demand for cars produced by its joint venture with BMW.

The Brilliance-BMW joint venture sold 22,000 cars in the first four months of the year, up 77.3% from a year earlier, Chairman Wu Xiaoan told Reuters at a news conference on Friday. He added that the company was confident it could achieve a sales growth of more than 30% this year from 44,880 cars in 2009.

The venture builds special long wheelbase versions of some cars for the Chinese market where chauffeurs are common.

Wu said sales of its minivan were on track to reach their target.

"We are focussing on two profitable businesses - the BMW venture and minivan manufacturing," he said.

Last year the company sold its self-developed but money-losing brand Zhoughua to parent Huachen Group.

Wu said he saw the BMW joint venture benefitting from the euro's recent fall against the yuan, which should lower production costs. Nearly 60% of the components used in the China-made BMWs are imported, with most coming from Europe.

Brilliance continued to see strong demand for the joint venture's cars, despite a recent slowing of car sales growth in China, which last year overtook the United States to become the world's largest auto market, he said.

There was a supply shortage for some BMW models due to capacity constraints at the joint venture, which could produce about 75,000 units per year, he added.

Brilliance China, the country's top minivan maker, reported sales of 78,968 units for 2009 and aims to sell 100,000 units this year.

"We will definitely be profitable this year," Wu said, adding that the profit level would be "very satisfying".

Brilliance China posted a net loss of CNY1.64bn (US$240m) for 2009. Analysts polled by by Thomson Reuters I/B/E/S forecast that the company would earn a net profit of CNY656.9m in 2010.

BMW and Brilliance China have started construction on the second phase of production facilities for their joint venture with a total investment of CNY10bn ($1.46bn) over three to five years. The work would add annual capacity of 200,000 units in 2012 and could be expanded to 300,000 per year, Wu said, adding that Brilliance China would use internal resources and bank borrowing to fund the expansion.

BMW, which began producing 3- and 5-Series models in China in 2003, may add production of the X1 compact SUV in China when the second phase opens in 2012 and was working with Brilliance China on battery-powered models, media reports said.

"We will introduce new models in China and are actively studying alternative energy cars and how to transform current models to run on alternative energy," Wu said, without providing details.

BMW Group sold more than 90,000 vehicles last year in China, which is the company's fourth largest market.

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