(updates with further comments)
FRANKFURT (Thomson Financial) - Bayerische Motoren Werke AG CEO Norbert Reithofer reiterated the carmaker's full-year earnings targets and said he is very confident that third quarter business development will be in line with the company's full-year goals.
Speaking at the IAA Car Show in Frankfurt, he added that he is 'very positive' about the company's sales growth this month.
Reithofer also reiterated that BMW is not interested in buying Volvo AB as this would not produce synergies.
'BMW makes rear-wheel drive cars and Volvo makes front-wheeled cars,' said Reithofer, emphasising the lack of synergies between the two brands.
He also said he was cautious about entering strategic alliances with other carmakers.
'I'm cautious when it comes to strategic alliances because it will take away our flexibility,' he said.
'What is important for BMW is our independence,' he added.
In principle, cooperation with other carmakers on specific projects has been useful for BMW, he said, and cited the tie-up with Peugeot to develop and produce 1.6 litre engines as an example.
He said he believes the tie-up with Peugeot will continue for another 10-15 years.
BMW recently said that it still aims to achieve a full-year 2007 pretax profit that, adjusted for the one-off gain on a Rolls-Royce exchangeable bond, would be above the record level posted for the previous year.
'We are confident that the third quarter (developments) will enable us to reach our goals in the full year,' he said.
For 2007, he said, the burdens stemming from weak currencies are expected to be lower than the 666 mln eur posted last year while the negative impact from higher raw material prices will be unchanged from the 2006 levels.
He said he believes the peak in prices of raw materials has already been reached this year.
Commenting on a strategy review BMW plans to unveil next month, Reithofer said the company will 'say something on volume-related issues' pertaining to the Mini brand.
Asked whether BMW would consider selling components to other carmakers, he replied: 'This is interesting and we have discussed this. It's an interesting business aspect.'
The strategy review in October would also address this issue, he added but declined to give details.
Asked whether BMW would consider making a car that is smaller than the BMW 1-Series, he said: 'I am not ruling it out. But I don't want to define the brand.'
He said the strategy review results in October will also touch on this issue.
Reithofer said BMW has spent 'several hundreds of millions of euros' on research and development of more efficient engines in the past year and the trend for higher R&D costs will continue as a result of stricter emission rules.
In the face of rising development costs, he said the company has 'left no stone unturned' in order to boost profit margins.
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