BMW said on Wednesday it aimed for steady profits this year despite the heavy cost of its biggest ever new model launch programme, according to Reuters.
Chief executive Helmut Panke said the company would strive to match last year’s earnings at the pre-tax and net levels, although the tense global situation made it difficult to give a more specific forecast, Reuters said.
“Nevertheless, the BMW Group seeks once again to achieve the same overall result this year as in 2002,” Panke told Reuters at the group’s annual news conference in its home town of Munich, adding sales of all its brands would rise provided an end to the Iraq crisis came within a “foreseeable” period.
BMW’s comments contrasted with mass carmaker Volkswagen, which warned earlier this month that operating profit would fall this year if current weak demand and unfavourable exchange rates persist, sending its shares tumbling, Reuters noted.
According to Reuters, the consensus forecast among 19 analysts polled by Multex Global Estimates is for BMW’s pre-tax profit to rise by around six percent to 3.5 billion euros ($3.7 billion) in 2003, with net profit up just under five percent at 2.115 billion.
Reuters noted that BMW has never brought so many new products to market in such rapid succession as it will this year, and cited finance chief Stefan Krause as saying the company’s profit would be weaker in the first half as development and launch costs continue to weigh.
But he said capital expenditure, which rose 15% to just over four billion euros last year, had hit its high point, expecting broadly the same level of spending this year, Reuters added.
Reuters said a pick-up in profits is widely expected in the second half of 2003 as BMW unveils its new products, which include an updated 5-series saloon, one of its main profit drivers, a new small X3 sports utility and a high-margin 6-series coupe.
But some of the shine was taken off the group’s outlook after the board member responsible for development, Burkhard Goeschel, told Reuters the new 5-series, key to the group’s aim of lifting earnings and sales in the second half, would probably not come to market before September.
The group had previously said production of the new 5 would begin over the summer, Reuters noted.
Panke told Reuters record sales of the group’s Mini brand would help keep overall unit sales flat in the first quarter, but BMW brand sales would slump eight percent to 215,000 units.