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Quandt family to stay at the wheel at BMW. (04/11/05)

The billionaire Quandt family have indicated that they will retain their controlling stake in BMW, confirming for the first time that they will not use the company's first share buy-back to reduce their 47 per cent holding.

The confirmation came as the German luxury carmaker reported worse than expected results for the third quarter, but stuck to full- year profit targets.

The Quandt family, which rescued BMW from a financial crisis 46 years ago, are notoriously secretive.

But Susanne Klatten, sister of BMW deputy chairman Stefan Quandt, has indicated she is willing to give up control of Altana, the German pharmaceutical company, prompting some speculation that family members could reduce their stake in the carmaker.

Helmut Panke, BMW chief executive, said the family had made clear there were "no considerations whatsoever" about reducing their holding.

"There is a clear confirmation that the interest this family holds in BMW will be maintained," he said.

The carmaker said third- quarter pre-tax profit dropped 17 per cent to Euros 647m (Dollars 774m), and blamed higher raw material prices, less favourable currency hedges and a Euros 175m hit from the paper loss on a bond exchangeable into shares of Rolls-Royce, the British aero engine maker.

The company reported a 4.4 per cent rise in operating profit, as soaring car sales pushed revenue up 10.5 per cent to Euros 11.7bn, and stuck to targets of "approximately" matching last year's full- year profit.

The shares fell 1.79 per cent to Euros 35.70.

Adam Jonas, motor analyst at Morgan Stanley, said that it now looked unlikely that BMW would match last year's Euros 3.55bn pre-tax profit.

"To achieve flat pre-tax profit for the full year would require fourth-quarter pre-tax profit growth of 40 per cent," he said in a note to investors.

Source: bmw2002.co.uk