BMW's China boost drives record dividend

Reuters (Frankfurt) - Luxury carmaker BMW (BMWG.DE) forecast record sales this year and said shareholders will pocket the company's highest ever dividend payout after growth in China fueled a surge in 2010 results.

The German carmaker, which also owns the Rolls-Royce and Mini brand, reported a jump in full-year net profit to 3.23 billion euros ($4.5 billion), from just 210 million euros a year earlier when carmakers were hit by the financial crisis.

The 2010 result beat a consensus forecast for 2.92 billion euros profit. BMW said it would pay a dividend of 1.30 euros, more than the 1.24 euros forecast, and the highest in its history.

BMW said it aimed to achieve record sales of more than 1.5 million vehicles in 2011, up from over 1.4 million cars this year helped by growth in China, the world's biggest auto market.

Premium and mass carmakers are looking to fast-growing markets like China as they struggle to grow sales in more mature markets.

BMW shares were down 1.75 percent by 1647 GMT, outperforming the autos index .SXAP which fell 2.55 percent.

Ruland Research strategist Heino Ruland said: "The outlook is particularly positive, as BMW kept it, despite the high costs for raw materials. Even though no concrete profit outlook has been given, the confirmation of the unit sales target and margin is good news."

Germany remained BMW's largest single market, with 267,160 BMW and Mini cars sold.

In market number two, the United States, it recorded a 10.1 percent sales increase to 266,580 units.

China, including Hong Kong and Taiwan, the third-biggest region for BMW, saw an 85.3 percent increase in sales to 183,328 units.

The announcement came as Volkswagen (VOWG_p.DE), Europe's biggest carmaker, reaffirmed its full-year targets to grow vehicle sales, revenue and operating profit above the record levels achieved in 2010.

Volkswagen also said it faced a bumpy road to a merger with Porsche (PSHG_p.DE) and its shares fell 3.5 percent.

Earlier this week BMW said growth in Asia, Europe and the United States boosted February sales of BMW, Mini and Rolls-Royce vehicles by 21.7 percent but warned growth would slow toward year-end.