FRANKFURT -- BMW AG expects annual earnings will be significantly better than previously forecast, thanks to soaring profitability at its core automotive business and an extra 100,000 in vehicle sales.
"In view of the strong performance to date and the good outlook for the coming months, the automotive segment is now expected to achieve an EBIT margin of over 10 percent for the full year," the company said, pre-releasing guidance ahead of its scheduled quarterly results on Aug. 2.
The premium carmaker expects sales this year to rise more than 10 percent to over 1.6 million vehicles versus a previous forecast of more than 1.5 million. In the first six months of the year the BMW Group sold 833,366 cars, a yearly rise of 19.7%.
BMW now expects to achieve an "even greater improvement in pre-tax earnings than originally predicted" for 2011, sticking to its pattern of only giving a clear target for the operating margin of its automotive segment.
The company continues to target an EBIT margin of between 8-10 percent for its automotive segment for next year, a target that it aims to sustainably reach in the future.
In early May, BMW said its automotive division's EBIT margin would exceed 8 percent while achieving higher 2011 pretax profit than in 2010.