BMW boss forecasts record sales

BMW's chief executive Norbert Reithofer is battling the strong euro

BMW's chief executive said he expects record sales and higher profits this year, despite the strong euro.

Norbert Reithofer said pre-tax profits should be higher than in 2007 and forecast sales of more than 1.5m cars.

But he said the strong euro, weaker US economy and higher raw material prices are creating "major challenges".

The US is BMW's biggest export market and last year the company incurred extra costs of $517m euros ($818m) to cover foreign exchange fluctuations.

"BMW is the most successful European (car) manufacturer in the American market," Mr Reithofer said on Tuesday.

"That is why the dollar's persistent weakness hits us harder than competitors."

Earlier this month, BMW announced plans to invest $750m (£373m) in car production in the US.

The extra investment at the existing Spartanburg plant in South Carolina, is aimed at increasing capacity from 160,000 to 240,000 units by 2012.

The move is set to create 500 new jobs and comes after the firm recently said it would cut 7.5% of its German workforce in 2008.