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By Bloomberg

BMW AG indicated that earnings growth will slow this year because of aging models and high spending on new technologies to fend off rivals.

The world’s largest luxury-car manufacturer said it expects “solid” growth in pretax profit this year. That compares with a forecast of a “significant” increase in 2014, when pretax profit rose 14 percent to 9.1 billion euros ($9.7 billion).

“Personnel costs will continue to rise, and upfront expenditure for new technologies will remain at a high level,” the Munich-based company said Wednesday in a statement.

BMW is bringing out 15 new and refreshed models this year, including the seven-seat Gran Tourer family wagon and a refreshed version of the top-of-the-line 7-Series sedan to stave off Audi and Mercedes-Benz. BMW’s profitability from carmaking declined last year, as development spending exceeded its target range.

Volkswagen AG’s Audi and third-place Mercedes both aim to overtake BMW in sales by the end of the decade and have been closing the gap. Audi even outsold BMW’s main brand in the first two months of 2015, while Mercedes posted the fastest growth rate of the three German luxury-car producers in the period.

“We intend to remain the world’s leading premium-car company,” BMW Chief Executive Officer Norbert Reithofer said in a speech prepared for the company’s annual press conference. “However, many uncertainties remain. Important markets like China are losing momentum.”

Development Spending

IHS Automotive estimates that the BMW nameplate will maintain its full-year lead with sales of 1.82 million cars, compared with 1.7 million deliveries by Ingolstadt-based Audi and 1.6 million by Stuttgart-based Mercedes.

BMW invested almost 4.6 billion euros on new models and technologies such as self-driving systems last year. That meant capital expenditures amounted to 5.7 percent of revenue, slightly higher than its goal of spending 5 percent to 5.5 percent. For this year, the company will try to keep the figure within that target range, Chief Financial Officer Friedrich Eichiner said.

BMW stuck to its goal of profit margins for the automotive division in a range of 8 percent to 10 percent of sales. The company, which also makes Mini and Rolls-Royce cars, expects to set a new record for the number vehicless delivered this year.

“We do expect volume growth from new products but think 2016 is the more exciting year” for BMW’s growth, Kristina Church, a London-based analyst at Barclays Plc, said before BMW’s event.