BMW said on Tuesday its pre-tax profit in 2003 would probably fall slightly below last year’s level, but it was confident that business would be stronger next year, according to the Reuters news agency.
Reuters said BMW, in the middle of its biggest new product programme, is striving for flat profits this year, but had previously said this could include a five to 10% deviation either way from last year’s €3.3 billion pre-tax figure.
“It is more likely to be under last year than over,” BMW finance chief Stefan Krause told Reuters in an interview at the Frankfurt international motor show.
BMW is unveiling a new 6-series coupe, small X3 sports utility vehicle, and a larger face-lifted X5 at the show, all of which it hopes will help improve business next year, Reuters said.
According to the report, Krause declined to give a profit target for 2004, but said with all the new models – including a recently-launched update of its key 5-series saloon – and a strengthening economy he was confident for business next year.
Reuters said analysts expect the successful recent launch of the 5-series and lower product costs to contribute to a significant upturn in earnings next year, with the market consensus for pre-tax profit currently standing at around €3.9 billion.
Krause told Reuters BMW had an annual capacity for its new X3, a smaller version of the X5 sports utility which has proved a success particularly in the US market, of 60,000 to 70,000 units with production at full capacity as of next year.
After a successful ramp-up, he reportedly said, the company was targeting an annual capacity for its new 5-series of 190,000 units as of 2004, while the annual target for the new 6-series coupe was 20,000 units.
According to Reuters, Kreuse also said he was happy with BMW’s current currency hedging rate against the dollar of about 60% for 2004 and about 30% for 2005, but added the company was constantly monitoring exchange rates.