BMW still sees FY pretax at 3.752 bln eur, forex burdens lower vs 2006

COPENHAGEN (Thomson Financial) - Bayerische Motoren Werke AG still expects to post a full year pretax profit of 3.752 bln eur, with the negative impact from exchange rate fluctuations totalling less than last year, chief financial officer Michael Ganal said.

Speaking to reporters at the media presentation of the BMW 1-Series Coupe in Copenhagen, Ganal declined to comment on the extent to which raw materials would hit the company's profits this year but confirmed the impact from currencies will be below the last year's 666 mln eur.

He admitted the depreciation of the dollar has been a challenge for the BMW Group, which has recently opted to produce more cars in the US in the future as part of its 'natural hedging' strategy.

BMW announced in late September its decision to expand the manufacturing capacity of its sole US plant - located in Spartanburg, South Carolina - from the current 140,000 units annually to 240,000 by 2012.

'The importance of our US plant has become even greater given the current weakness of the dollar,' he said.

He said the expansion of Spartanburg's manufacturing capacity raises the 'challenging' issue of how to source components within the US.

Touching on the overall strategy of possibly entering into a new market segment, he said BMW has considered a few possibilities, including having a fourth brand, either by setting one up on its own or acquiring a brand from another carmaker.

But BMW is not under any time pressure to make a decision on whether it should add to its current brand offering of BMW, MINI and Rolls Royce.

'We are open to it but we have not decided on it,' he added.

Commenting on the ongoing talks with rival Daimler AG regarding a possible cooperation, Ganal said there are advantages in setting up tie-ups between the two companies because both make premium-segment cars.

'From our point of view, there are concrete possibilities to reap economies of scale. That is the way we want to go and there are advantages one can get from it,' he said.

He said the risks stemming from any tie-up between the two companies, such as brand dilution, 'tend to be low' when compared to the 'chances', such as producing bigger volume at a lower cost.

He declined to specify either a timeframe on when the talks with Daimler would end or what stage they have reached.

BMW last September announced that it would consider tie-ups in general in for components and modules.

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