UPDATE 2-BMW sees new models driving 2011 profit to record high

* Sees further growth in earnings, pretax to hit new record

* Automobiles EBIT margin to surpass 8 pct in 2011

* Sees well over 1.5 mln group vehicle sales in 2011

* Shares fall 2 pct vs 4 pct drop in autos index .SXAP

(Adds comments from press conference)

By Christiaan Hetzner

MUNICH, March 15 (Reuters) - Germany's BMW (BMWG.DE) expects sales of its new models, including its 1 Series compact will help it achieve record earnings this year.

The Munich-based carmaker said on Tuesday group sales would rise to well above 1.5 million vehicles, with sales at the BMW, Rolls-Royce and Mini brands expected to hit all-time high as it rolls out at least six new models this year.

"2009 was the year of the economic crisis. 2010 was our year of a new beginning," said Chief Executive Norbert Reithofer. 2011 will be our year of opportunities."

Reithofer expects group pretax profit to surpass last year's record 4.84 billion euros ($6.75 billion), while its core automobiles segment is expected to generate earnings before interest and tax (EBIT) equivalent to more than 8 percent of revenue in 2011.

Headwinds from soaring raw material costs in the low hundreds of millions of euros this year should be roughly offset by foreign exchange tailwinds of the same magnitude, it said.

For next year, BMW stopped short of promising an improvement after reaffirming its 8-10 percent EBIT margin target for Automobiles.

"We are confident that we will be able to keep our returns within our target range beyond 2012," finance chief Friedrich Eichiner said.

BMW shares were down 2 percent at 53.81 euros at 1127 GMT, in line with a drop of the German blue chip DAX .GDAXI index after Japan had warned of significantly higher radiation levels following explosions at one of its quake-stricken nuclear power plants.

But BMW still outperformed a 4 percent fall in the autos sector .SXAP.

LATIN AMERICA

Analysts have been critical of BMW's very conservative targets, pointing out that the carmaker should be raking in profits in the current favourable environment.

They argue that profitability should be peaking over the next few years as new versions its most important models are launched, requiring few incentives need to be offered to move metal.

BMW launched the revamped 5 Series full-sized saloon and estate last year and its best selling 3 Series mid-sized saloon is due in 2012.

"Audi changed the whole game with its 9.4 percent margin last year," one London-based auto analyst said last Thursday, after BMW published its record earnings for 2010.

Reithofer emphasised the need for a long term, sustainable growth, and in particular diversifying the group's geographical footprint to avoid an overdependence on booming Asian premium car markets, such as China, where sales are set to grow again at a strong double-digit rate this year.

"As a next strategic step, we are considering the set-up of further (manufacturing) sites, for instance in South America," he said.

BMW declined to speculate on what effects the devastating earthquake will have on demand in Japan, its seventh largest individual market where it sells nearly 44,000 vehicles (a year).

"It's too early to assess the market impact," sales chief Ian Robertson said. (Editing by Hans Peters and Louise Heavens) ($1=.7173 Euro)