Executives from Brilliance China Auto and Germany's BMW said the joint venture they started last month should soon turn a profit.

"We believe that our joint venture will be profitable next year through great efforts and co-operation between our two sides, although it will make some losses this year,'' said Wu Xiaoan, chairman of Brilliance China Auto.

Start-up losses are par for the course, Helmut Panke, BMW's chairman indicated.

"It is just a normal start in this type of situation,'' Pankesaid.

"It will become profitable much faster than start-ups of other car joint ventures in China,'' Panke said.

The two chairmen made their remarks on Thursday when asked about a recent forecast by investment bank Goldman Sachs that the venture will report 100 million yuan (US$12 million) in losses this year.

Goldman Sachs said the venture will not be profitable until its annual sales reach 30,000 sedans.

The US$479 million joint venture is based in Shenyang, capital of Northeast China's Liaoning Province. BMW, Brilliance China and the provincial government hold 50, 40.5 and 9.5 per cent stakes in the venture, respectively.

"Many carmakers operating in China are yielding a profit margin of up to 30 per cent, let alone BMW as a top premium brand,''an industry analyst said.

The joint venture will begin selling the BMW new 5 series sedans on Saturday in China.

The BMW 545i and 530i sedans will retail between 690,000 yuan (US$83,300) and 1.01 million yuan (US$120,200).

The joint venture launched the BMW 325i last month.

Officials said the firm will produce 11,000 sedans this year and 25,000 units next year.

BMW anticipate annual production to reach 30,000 units "over the medium term,'' Panke said.

"We are aiming to double our (annual) Asian sales to around 150,000 cars in the next five years... China plays a key role in terms of our goals in Asia,'' he said.

During the first 10 months of this year, BMW more than doubled its sales in China, including those exported to and produced in the nation, to 11,847 units, according to Panke.

"We clearly see ourselves as the leader in the premium sedan segment, and we are in the best position to serve customers here in China,'' he said.

Currently, the fast-growing premium sedan segment in China is mainly controlled by Audi of Germany's Volkswagen Group, which kicked off local production in the 1990s.

Mercedes-Benz, another premium brand, will also start to produce its sedans in Beijing in 2005.

Dealership for the BMW sedans made in China will increase to 40 in 2006, according to BMW officials.

"The introduction of the BMW sedans is a good example of Brilliance China's strategy to promote its own development through co-operation with foreign partners,'' said Wu.

Brilliance China is also producing the Zhonghua sedan, its self-owned brand, on the same assembly line with BMW vehicles in Liaoning Province.

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