BMW AG (BMW.XE) raised its earnings and sales outlook for 2011 : Luxury-car maker BMW AG (BMW.XE) Tuesday raised its earnings and sales outlook for 2011, the latest sign that demand for premium vehicles is booming across the globe despite swirling sovereign-debt concerns in Europe.
"Thanks to strong demand ... during the second quarter and for the full year, the BMW Group now expects that business performance and earnings will be significantly better than previously forecast," the Munich-based company said.
The world's best-selling luxury car maker is now targeting a sales increase of more than 10% in 2011 to more than 1.6 million cars, up from a previous forecast of more than 1.5 million car sales. BMW posted a 20% sales rise to 833,366 cars of its BMW, Mini and Rolls-Royce cars in the first half of the year, which marks a new record level.
BMW reiterated, however, that sales volume and earnings growth is likely to slow in the second half of the year due to effects related to model changeovers.
BMW expects its core auto segment to achieve an earnings before interest and tax, or EBIT, margin of over 10% in 2011, up from a previous forecast of more than 8%.
BMW and its luxury-car making peers are currently reaping record profit margins, driven by strong demand in China, where demand particularly for the companies' large flagship models is booming.
Late Monday, Volkswagen AG (VOW.XE) Chief Executive Martin Winterkorn dismissed concerns that the European debt crisis would hurt demand for cars and said that the company is on track to reach the 8 million vehicle sales threshold this year for the first time. Volkswagen's Audi AG (NSU.XE) brand was the world's second-bestselling premium automaker in the first half of the year afer BMW.
BMW said in 2012 it still targets an EBIT margin of 8%-10% and a return on capital employed above 26% at its auto segment. BMW's financial services unit continues to target a return on equity of at least 18% next year.
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