FRANKFURT - THE German luxury car maker BMW launched a long-term strategy Thursday aimed at selling more than two million vehicles a year by 2020 while also increasing productivity.

BMW sold a record 1.37 million motorcycles and automobiles under the BMW, Mini and Rolls-Royce brands in 2006.

Increased productivity should allow the group to make savings of around 6.0 billion euros (S$12.7 billion) by 2012, a brief statement to financial markets said.

Shareholders were told that the luxury car group would distribute a markedly higher dividend this year and present a share buyback plan at some point after the next 12 months.

Investors who had pushed BMW shares up sharply earlier in the day were not overwhelmed however, and the stock showed a more modest gain of 1.03 per cent at 47.16 euros in midday trading on the Frankfurt stock exchange.

The DAX index of leading shares was 0.50 per cent stronger overall. -- AFP