BMW R&D spending rises 18 percent on higher annual profit

FRANKFURT (Reuters) - German carmaker BMW expects record sales this year as it reported a 5.3 percent rise in 2017 operating profit on surging demand for high-margin sports utility vehicles, helping to offset higher research spending.

Full-year earnings before interest and tax (EBIT) rose to 9.88 billion euros ($12.23 billion), BMW said on Thursday, helping the operating margin in its automotive division to remain at 8.9 percent, compared with a year earlier.

BMW released earnings ahead of its scheduled annual results press conference on March 21. It said it would propose a divided of 4 euros per common share.

Research and development expenditure rose by 18.3 percent last year to 6.1 billion euros, as the German carmaker invests in electric and autonomous vehicle technologies.

The BMW brand reported car sales of 2.09 million vehicles last year but rival Mercedes-Benz saw higher sales of 2.29 million passenger cars.

Overall automotive sales, including the Mini and Rolls-Royce brands, rose 4.1 percent to 2.46 million vehicles, BMW said. Deliveries electric and hybrid vehicles jumped by 65.6 percent to 103,080 units.

BMW intends to increase the sales volume of electrified vehicles to at least 140,000 units in 2018 and bring more than half a million electrified vehicles on to the roads by the end of 2019, the company said. ($1 = 0.8078 euros)

(Reporting by Edward Taylor; Editing by Douglas Busvine/Keith Weir)