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BMW may set up new brand: report

German car group Bayerische Motoren Werke AG (BMW) might set up a fourth passenger car brand in addition to its current BMW, Mini and Rolls-Royce lines, a press report said yesterday.

But BMW has no plans to acquire Volvo from the US automaker Ford, the Frankfurter Allgemeine Zeitung newspaper added, citing sources.

It said a new brand was one of the topics to be addressed in a review of the company's future strategy, details of which BMW was to disclose later in the day.

The German magazine Capital said yesterday that the plan would concentrate on boosting productivity but did not call for major job cuts.

New technologies that should reduce auto pollution were also tipped to figure high on the agenda, according to the magazine, which did not identify its sources.

A BMW spokesman declined to comment on Wednesday, but a source close to the matter said that BMW boss Norbert Reithofer would present the strategy to his supervisory board yesterday before giving a press conference in Munich.

The German group plans to launch several new models, including a Mini estate, a Mini sports utility vehicle, and a smaller Rolls-Royce to boost sales and lower carbon dioxide emissions, Capital said.

It added that the changes should allow the German automaker to sell 1.6 million units by 2009, a year ahead of schedule.

BMW sold a record 1.37 million vehicles last year and is targeting 1.4 million this year, but is hindered by rising commodity prices, the euro's increasing value against the dollar and yen, and the cost of developing "greener" vehicles.

BMW was upgraded to "buy'' from ``hold'' at Deutsche Bank AG.

"Management will take action on both" cost and revenue, analysts Jochen Gehrke and Gaetan Toulemonde wrote in a note dated yesterday.

"We see significant total return potential in BMW shares," they wrote.

The bank raised its price estimate on the shares 46 percent to 60 euros.

The stock gained 1.41 euros, or 3.1 percent, to 46.68 euros on Wednesday.

Separately, Ferrari SpA, Fiat SpA's luxury sports-car unit, expects global sales to surpass 6,000 vehicles for the first time this year as it expands in new markets.

Sales will rise 5.3 percent from last year's 5,700 cars. The company will limit production increases to 5 percent a year to maintain exclusivity, said Jean Todt, Ferrari's chief executive officer, in Tokyo yesterday. The company will probably sell 300 cars in Japan this year.

Record economic growth and an increasing number of millionaires in countries such as China and India may help Ferrari expand in Asia. Porsche AG, Lamborghini SpA and other luxury carmakers are also setting up more dealerships in the continent, home to the world's two fastest growing major economies.
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