The world's biggest-selling luxury carmaker reported a second-quarter net profit of €831 million ($1.1 billion), compared with a net profit of €121 million ($160 million) in the same period last year. BMW's quarterly revenues were €15.35 billion ($20.3 billion), 18 percent higher than a year ago

Norbert Reithofer, BMW's chief executive, said the company was profiting from demand for its new vehicles, efficiency enhancements, and an economic upswing in some of its main markets, including China, North America, India, and Brazil.

The company said that its performance put it on track to meet its target of achieving an earnings before interest and tax margin of 8-10 percent in its core automotive division and a return on equity of at least 18 percent in its financial services segment by 2012.

BMW said that it still expected its sales to increase by about 10 percent to more than 1.4 million vehicles, about the same as the 1.43 million cars it sold in 2008, the first year of the financial crisis, but still fewer than the record 1.5 million vehicles it sold in 2007.

However, the company said that it was keeping in mind that "some economic risks" could persist in the second half of this year and so its forecast held only if the economic recovery continued and business conditions were not "significantly dampened".

"We have taken a major step toward achieving our profitability targets for the year 2012," Mr Reithofer told listeners at an earnings presentation. "However, we are aware that this is not a time to sit back and relax."

BMW's chief executive said that the company was aiming for "sustainable growth in an uncertain environment."

The Munich-based carmaker raised its earnings guidance in July but its second-quarter numbers were still stronger than most analysts had expected. Analysts polled by Reuters had forecast revenues of €14.7 billion ($19.44 billion), against the €15.3 billion ($20.2 billion) the company achieved.

BMW said that sales of vehicles under its own marque and the Mini and Rolls-Royce brands were 13 percent higher in the first half, at more than 696,000 vehicles.

The company's core automotive division reported second-quarter ebit of €1.32 billion ($1.74 billion), compared with negative ebit of €31 million ($41 million) a year ago.

BMW's motorcycles unit reported a 22 percent rise in second-quarter sales and improved first-half earnings in spite of bad business conditions in the segment. While industry sales as a whole are contracting, BMW said that sales of its own motorcycles would increase in 2010.

The carmaker reported an improved pre-tax profit of €379 million ($501 million) for the second quarter in its financial services division, which it attributed to the economic recovery and lower refinancing costs.

BMW's share price rose by 2 percent in early trading on Tuesday to just under €44 ($58).