FRANKFURT (Bloomberg) -- BMW Group expects global demand for cars to rise this year, underpinning its goal to sell a record number of vehicles in 2014.
Rising demand in North America and China will set the pace for the expansion, which will be supported by a European car market that shows signs of recovering from years of contraction, BMW said today in a statement released during the carmaker's annual general meeting.
This year will "be a year of growth opportunities for the automotive industry," even as volatility persists, CEO Norbert Reithofer said in the statement. "Everything is becoming more complex and more global."
BMW Group stuck to its forecast that annual group deliveries, including the Mini and Rolls-Royce brands, will exceed 2 million autos for the first time in 2014, two years earlier than planned. BMW has been pushing sales growth as it seeks to fend off rivals Audi and Mercedes-Benz.
Investments to develop new models to woo more buyers caused the company’s earnings to narrow to 9.5 percent of revenue in the first quarter from 9.9 percent a year earlier. The BMW brand has been the premium-car sales leader since overtaking Mercedes in 2005. Audi, which now ranks second, and Mercedes have each vowed take the top spot by the end of the decade.
Backed by new compact models and the upgraded top-end S-class sedan, Mercedes cut BMW's lead in the first four months of 2014 by 12 percent from a year earlier to about 61,750 deliveries, according to figures the companies released in the past week. Mercedes is rolling out 30 autos by the end of the decade, including a dozen all-new cars, in its bid to surpass BMW.
Audi too will introduce 17 new or revamped vehicles in 2014, including a remake of the TT sports car. The VW unit trailed BMW by 7,200 cars through April, compared with a lag of about 9,000 deliveries a year ago.
To maintain the top industry spot, BMW is rolling out new models including the 4-series coupe, the X4 SUV, the van-like 2-series Active Tourer and the i8 plug-in hybrid sports car. First-quarter investments by BMW in new products and equipment rose 2 percent to 1.24 billion euros, with research and development spending increasing 4 percent to 993 million euros.
Reithofer today reiterated a forecast of a significant gain in pretax profit this year as 16 new and refreshed models lift deliveries. "Investment secures our future," said Reithofer. "Our economic success, innovation and financial strength provide us with the latitude we need to make those investments."
BMW shareholders at today's meeting will vote on raising dividends 4 percent to a record 2.60 euros per common share and 2.62 euros per preferred share. That translates into an unchanged payout ratio of 32 percent of net income, at the lower end of a target corridor of 30 percent to 40 percent.