March 21, 2018 / 9:09 AM / 4 months ago

BMW ramps up R&D spending for electric, autonomous cars

Munich, March 21 (Reuters) - German carmaker BMW said it will raise research and development (R&D) spending to an all-time high of up to 7 billion euros ($8.6 billion) this year to bring 25 electrified models to market by 2025.

“Investment will rise by a further high three-digit million euro amount year-on-year, primarily from the ongoing new model initiative as well as continued work on e-mobility and autonomous driving,” BMW said in a statement on Wednesday.

Electric and autonomous cars spending already caused R&D costs to rise by a billion euros last year, reaching 6.1 billion euros.

BMW’s R&D ratio for 2018 is expected to be between 6.5 percent and 7 percent of sales. In the next two years the R&D ratio is expected to remain above its usual target corridor of 5 percent to 5.5 percent range, BMW said.

The Munich-based maker of BMW, Rolls-Royce and Mini vehicles said that despite higher spending it expects group pretax profit to be over 10 billion euros in 2018, at least in line with last year’s level.

BMW this month reported a 5.3 percent rise in 2017 operating profit on surging demand for high-margin sports utility vehicles, helping to offset higher research spending.

$1 = 0.8140 euros Reporting by Edward Taylor Editing by Ludwig Burger

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