UPDATE 1-BMW July vehicle sales outpace Audi, Mercedes

Tue Aug 7, 2007 5:27am EDT

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FRANKFURT Aug 7 (Reuters) - BMW (BMWG.DE), the world's largest premium carmaker, reported group vehicle sales grew by a fifth in July on the back of strong demand at both its core BMW brand and Mini.

Deliveries to customers rose 20 percent to 123,017 cars and light trucks last month, with solid growth in Europe, North America and Asia, pushing year-to-date sales to 853,202 vehicles for a gain of 6.5 percent, BMW said on Tuesday.

By comparison, major rival Audi (VOWG.DE) managed a 9.2 percent gain in sales last month to some 81,000 vehicles, with Mercedes Car Group DCXGn.DE posting only a 1.4 percent increase to 103,700 cars and light trucks.

BMW has forecast unit sales will grow by a high single-digit percentage to over 1.4 million units following the relaunch of key models like the X5 offroader and Mini subcompact as well as new derivatives and facelifts that include the 1 Series Coupe and the 5 Series saloon and the Mini Clubman estate.

Sales of the group's core BMW brand increased by 20.2 percent to 104,096 vehicles. The X5 contributed the bulk of the growth with 70 percent more units delivered to customers.

Mini sales jumped 19.1 percent to 18,838 units. Michael Ganal, head of group sales and marketing, attributed the strong performance to heavy investment in reducing car emissions of greenhouse gas carbon dioxide (CO2).

"One of the decisive reasons for our market success is undoubtedly the fact that we are well ahead of our competitors in implementing measures to reduce CO2 emissions," he said in a statement.

"By the autumn of this year, around 40 percent of the new vehicles delivered to customers by the BMW Group will have a CO2 emission level of 140 grams per kilometre at most."

Last week, Chief Executive Norbert Reithofer said unit sales should rise some 20 percent, after 15 percent in June. But the stock tumbled that day as BMW's second-quarter earnings revealed a worse-than-expected decline in profitability that lagged both Audi and Mercedes.

Margins before tax at BMW's core automotive division shrunk by 170 basis points to just 5.6 percent of revenue compared to the previous year's quarter due in part to adverse currency effects, although car sales rose by 8.6 percent.

((Reporting by Christiaan Hetzner; Editing by David Cowell; E-mail: christiaan.hetzner@reuters.com; +49 69 7565 1249)) Keywords: BMW SALES/

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