BMW announced that it is well on track to meet - and even exceed its goal of reducing spending on components and supplies by $5.2 billion by 2012. BMW says that it was able to do so partly due to a partnership with rival Mercedes-Benz.

Bloomberg is reporting that BMW, the world's largest luxury automaker, has announced that it is on track to not only meet its goal of saving $5.2 billion by 2012, but that it will "significantly" surpass its goal.

"We can say that from today's perspective we will certainly and easily reach the 4 billion-euro savings goal, and even significantly surpass it," said Herbert Diess, the management board member responsible for the cuts.

Diess' comments come after BMW announced first-quarter net income of $417 million - surpassing the expected earnings of just $340 million. These profits represent an increase of $196 million compared to the same quarter in 2009. BMW attributes some of the increase in profits to the strong demand for the 7-Series sedan, as well as cost savings achieved thanks to a partnership with Mercedes-Benz.

BMW and Mercedes-Benz have worked together during Q1, 2010, which is expected to reduce costs for both automakers by roughly $129 million per year by 2012, according to Diess.

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