BMW remains confident for 2012 as U.S. recovers and Europe moves towards debt reduction

Article by Christian Andrei, on November 18, 2011

BMW is optimistic for 2012 as the U.S. continues to recover from the recession in 2009 and Europe is taking "positive" steps in dealing with the debt crisis, the company's CFO Friedrich Eichiner stated. He further said that what is needed is a "clear sign" that the two nations are serious in their finances. He forecasted "double-digit" percentage sales gain in 2012 in the U.S., probably outperforming Germany as the company's largest market in the future.

The cost to make the new 3 series will be lower by 7 percent to 9 percent because it shares components with other models, Eichiner disclosed.

This could also increase profit margins for the company, which targets earnings before interest and taxes of around 8 percent to 10 percent of sales beginning 2012. The company's automotive unit posted a decline in operating profit margin to 11.9 percent during the third quarter from a record 14.4 percent in the previous quarter on spending on new models such as the 3 series.

From the record pace during the first half, growth has slowed for luxury vehicle makers, as the debt crisis in Europe unsettles consumers. Total registrations for new vehicles in October declined 1.4 percent to 1.04 million units from 1.06 million units from the same month last year, the Brussels-based European Automobile Manufacturers Association disclosed in a Wednesday statement. Sales for the first ten months this year dropped 0.9 percent to 11.5 million registrations. [source: BusinessWeek]

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