The ever more stringent European emissions standards are a challenge for all carmakers, not just BMW. Basically, a lot of the difficulties that apply to BMW also apply to the automotive industry as a whole.

In regards to currencies, automakers will hedge against a currency years in advance. Therefore although the € has gained strength, essentially what the German and other EU carmakers did was lock in, or hedge the currency years in advance (usually 3-5yrs I think) so that fluctuations will not significantly erode the bottom line. That said, North America has been an unprofitable market for BMW in the last few years. That's reflected in the shift of vehicle allocations to other markets such as the Middle East and Asia, where there has been continued growth in spite of the recession. Once again, this statement also applies to other EU makers as well.