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BMW Plans to Sell More Than 2 Million Cars/Year by 2020

BMW, the world's largest premium carmaker, aims to sell significantly more than 2 million vehicles a year by the end of the next decade and earn up to a 10% return on sales before interest and tax at its core automotive division by 2012.

As part of its heavily anticipated strategic review, BMW also said on Thursday it would be open to acquisitions to spur growth and it had even looked into buying or setting up a fourth brand at one point.

While it promised to pay a significantly higher dividend for 2007, it said it would use its cash gradually to fund out its pension obligations and place the option of a share buyback on the back burner for the next 12 months.

BMW announced in mid-March its first strategic review since 2001 and set itself "no limits," acknowledging this included possible acquisitions despite its failed takeover of British carmaker Rover in 1994 that led to a culture of independence.

Under previous CEOs Joachim Milberg and Helmut Panke, BMW enjoyed years of solid gains in retail volume, breaking vehicle sales records time after time on the back of sporty new models like the X3 sport utility vehicle, the 1 Series hatchback and the retro Mini subcompact.

Investors have become impatient, though, as the stock's performance and valuation began to lag resurgent European rivals like Volkswagen and DaimlerChrysler .

Moreover BMW's margins have steadily eroded in recent years, which the company has mainly attributed to the strong euro and rising raw material costs.

BMW shares were off session highs but still up 1% at 47.15 euros, one of the top gainers among German blue chips.