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BMW unhappy with profit levels

Dr Norbert Reithofer, chairman of BMW’s board of management, has called for the business to increase its global retail sales to 1.8 million by 2012 after disappointing third quarter profits.

The announcement was made at BMW’s interim report this week.

Reithofer also launched what he calls a ‘top-down information and communication initiative’ called ONE (opportunities, new, efficiency) to help BMW’s employees get to grips with its restructuring process.

Reithofer said: “I am firmly convinced that, by realigning our strategy, we made the right decisions for the BMW Group. These decisions will pay off mainly over the medium to long term. This is how we will continue to increase our company’s value in the future.”

Group profit before tax rose to €765m (£534.2m). This represents a 6.3% increase over the level achieved in the third quarter of 2006; however analysts had expected profits to rise to at least €890m (£621.3m).

Automobile retail generated by the BMW Group in the third quarter of 2007 rose to a total of more than 364,000 cars. Retail recorded by the BMW, Mini and Rolls-Royce brands was therefore 12.8% higher year on year. Over the first nine months, deliveries increased to over one million vehicles.

This is a new all-time high. It is 7.2 percent higher than in the third quarter of 2006.

BMW Group revenues rose in the third quarter of 2007 by 19.2% to €13.7 billion (£9.6bn) year on year. Compared with the first nine months of 2006, BMW Group revenues from January to September 2007 were up 11.1% to €40.4bn (£28.2bn).

Profit before tax after nine months totalled €2.7bn (£1.9bn), 17.4% lower than in the corresponding period last year.

Reithofer said: "We are not satisfied with our current financial or earnings situation. What’s more important is that we are now setting the right course for the future.

"In the last few years, we constantly maintained a high level of group profit despite rising external burdens. With our strategic realignment, we are now clearly focusing on improving profitability."

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