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BMW Seeks Sales Growth, Lower Margins as New Models Hit Market

Bayerische Motoren Werke AG (BMW), the world’s largest maker of luxury vehicles, predicted record sales and profit in 2012 boosted by eight new and updated models.

The maker of the Z4 roadster stuck to its target of beating last year’s record earnings on higher deliveries and the auto unit generating a margin at the “upper end” of a range of 8 percent to 10 percent, Chief Executive Officer Norbert Reithofer said today. The Munich-based company reported earnings before interest and taxes of 11.8 percent from vehicle sales last year.

“These targets are based on the assumption that the underlying economic conditions remain stable,” Reithofer said in a speech at the company’s annual shareholder meeting. “The high level of public debt in some countries and the euro crisis harbor ongoing risks for the global economy.”

The car and motorcycle manufacturer is expanding to fend off efforts by Volkswagen AG (VOW)’s Audi and Daimler AG’s Mercedes-Benz to grab the sales lead in luxury autos by the end of the decade.

The maker of BMW, Mini and Rolls-Royce models expects higher sales at all its brands, pushing pretax profit higher, Reithofer said today. First-quarter profit beat analyst estimates, with ebit climbing 19 percent to 2.13 billion euros, BMW said May 3.

The company is rolling out a 3-door version of the 1-series compact, a new derivative of the 3-Series, as well as updating the X1 compact sport-utility vehicle, X6 luxury SUV and 7-Series sedan in 2012. These models will add to the Mini Roadster, which hit the market earlier this year, and coupe and convertible versions of the high-performance M6.

Sales of the 1-Series compact, which was revamped late last year, climbed 20 percent in the first quarter while the X3 SUV surged 55 percent, lifting total sales to 425,528 vehicles. BMW is counting on demand for a new generation of the best-selling 3-Series sedan, which was introduced in February, to boost deliveries further and offset development costs for the i3 battery-powered city car, which will be rolled out in 2013.

To contact the reporter on this story: Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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