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Profits slip at BMW

BMW has announced that its first-quarter pre-tax profit fell 4.6%, due to a weaker result at its core automotive business.

Earnings before taxes declined to €812m (£551.7m) compared with an €851m (£578.1m) for the first quarter last year.

BMW reaffirmed though that it expects earnings this year to roughly match the record 2004 result, despite the drop in earnings during the first three months.

"Significantly higher raw material prices, currency factors and increased competitive pressure all had a negative impact during the first quarter 2005," the company said in a statement.

Automotive pre-tax profit fell 5.4% to €702m (£477m) due to the weak dollar and model changeovers, leading to a first quarter earnings margin for the division of 7.05%.

Group net profit was in line with expectations, though, falling 0.8% to €519m (£352.6m).

Early last month, BMW said strong demand for its compact 1-Series helped boost group car sales by 8.2% in the first quarter to a record 292,207 vehicles.



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