BMW expects a big rise in its earnings this year

BMW, the world’s biggest premium carmaker by sales, expects a significant rise in pre-tax profit this year, helped by demand for new models like its 5 Series sedan and better results in all three businesses.

“We want to see visible progress in 2010 towards achieving our profitability targets for 2012,” chief executive Norbert Reithofer said yesterday.

BMW said its core Automobiles segment would post an operating margin in the low single digit percentage range this year, while maintaining roughly the £1.3bn in adjusted free cash flow it generated in 2009.

The segment swung to a loss before interest and tax last year mainly due to a sharp drop in sales, but headwinds of £174m from foreign exchange effects also added to the pain.

The German carmaker expects group vehicle sales to rise by a “solid” single-digit percentage to more than 1.3m vehicles.