BMW sees brighter second half despite German gloom

CAGLIARI, Italy, May 25, 2003; Reuters reported that a gloomy home market continues to weigh on German luxury carmaker BMW but it still sees an upswing in the second half of the year, its chief financial officer said.

"In Germany there is simply no confidence at the moment," Chief Financial Officer Stefan Krause said in remarks embargoed for release on Sunday.

A weak economy in Germany, BMW's key market, has led to a decline in the country's flagship car industry since the middle of 1999. "It's logical that people are not making big investment decisions right now," he said at a press conference to showcase its new 5-series car which is due to be launched in Europe in July.

Following the end of war in Iraq, the economic climate had taken a turn for the better he said, adding the firm still expected further improvement in the second half of the year, helped by the 5-series.

"We are expecting a lot from that vehicle, we are convinced about the product," Krause said of the car which has an optional infrared system that keeps its distance from the car in front.

He also repeated BMW's goal was to match last year's record earnings. Last year, pre-tax profits rose two percent to 3.3 billion euros, while net income rose eight percent to 2.0 billion.