Statement Dr. Norbert Reithofer, Chairman of the Board of Management of BMW AG

We at the BMW Group have set ambitious targets. And we will pursue these targets with determination – also in a volatile environment. Today, I would like to begin my remarks with a brief personal assessment of the current situation. On the one hand, there are positive factors: We are the world’s leading premium car … Continued

We at the BMW Group have set ambitious targets. And we will pursue these targets with determination – also in a volatile environment.

Today, I would like to begin my remarks with a brief personal assessment of the current situation.

On the one hand, there are positive factors:

  • We are the world’s leading premium car company.
  • We remain profitable and continue to build on a strong financial foundation.
  • With BMW i, we are pioneering the way toward sustainable individual mobility.

All of these factors are key elements in our strategy leading up to 2020.

On the other hand, even with these strengths, we have to be realistic. We have to acknowledge that we are all facing dramatic challenges and uncertainties in the global economy today. Our business environment is becoming increasingly tough:

  • Growth is slowing down in many countries, significantly so in some cases.
  • Consequently, competition is stepping up further.
  • Risks are increasing.
  • CO2 emission targets across the globe are extremely ambitious.

However, we remain cautiously optimistic. We will continue to chart our course – the BMW way. We had a strong third quarter. We achieved new record performances in terms of sales, revenues, pre-tax result and Group net profit.

Following the first nine months of the year, we are on track to meet our targets for 2012. And we deliver on our promises.

So, what did we achieve from January to September 2012?

  • An EBIT margin in the Automotive Segment of 10.9 per cent.
  • A pre-tax result of over 6 billion Euros. So we maintained the high level achieved during the same period last year.
  • A Group net profit of more than 3.9 billion Euros. This too is about on par with the previous year’s high result.

The attractiveness of our products and services is the basis for this success.

In the first nine months of 2012, over 1.33 million customers bought a BMW, MINI or Rolls-Royce car – an increase of 8.3 per cent. Never before have we sold that many cars within this period.

And we aim to grow further.

This is why:

  • We are planning and acting with great foresight.
  • We are setting clear priorities internally.
  • We are investing today in our success of tomorrow.

In 2007, we launched our corporate strategy. This built upon Efficient Dynamics and our approach to resource-efficient production. Together, all of these elements form the foundation of our current success.

As we did in 2007, we are again looking ahead and positioning the company to meet future demands.

What does this mean?

We are investing:

  1. In new technologies.
  2. In established and new facilities as well as in mature and growth markets.
  3. In our brands and sub-brands.
  4. In new services and offerings for our current and future customers.

To the first point, new technologies:

2013 will be all about revolution – the start of series production of BMW i. We will bring sustainable mobility to the road. We consider electric mobility a technology with the potential to achieve emission-free sheer driving pleasure.

Through this revolutionary approach, we can draw on the vast knowledge of our customers and their experiences with e-mobility:

  • 16 million test kilometers with the MINI E and
  • 5 million test kilometers with the BMW ActiveE.

The feedback from our customers is positive. Already today, the range of the cars is sufficient to meet day-to-day mobility needs in urban traffic.

But BMW i is far more than the electric drive. Our approach is comprehensive:

  • customized car concepts;
  • new materials and processes;
  • sustainability along the entire value chain;
  • and innovative mobility services.

We are creating a completely new world of individual mobility.

We are pioneering a brand new approach to individual mobility.

  1. By 2020, we will have halved the CO2 emissions of our global car fleet compared to the mid-1990s – thanks to our innovative Efficient Dynamics technologies.
  2. Our BMW i production supports the change towards alternative energy in Germany and sets new global standards: In the assembly of our BMW i cars at our Leipzig plant, we will use renewable energy. We are currently setting up a wind park on the plant premises.

To the second point, facilities and markets:

We continue our balanced growth. Proof of this is our sales distribution in the first nine months of this year: Following Europe, the share of sales in China, the US, Germany and the rest of the global markets was on the same level.

This balanced sales distribution is paying off – especially in a volatile environment. It reduces the risks when growth in individual markets slows down.

We are also taking the BMW Group’s international focus to the next level.

  • In China, our new plant in Tiexi, which we run together with our partner Brilliance, has come on stream. In the mid-term, we can produce up to 400,000 units at the Shenyang site.
  • In the UK, we are expanding our MINI production sites Oxford, Swindon and Hams Hall. The investment volume will total 750 million pounds sterling by 2015.
  • The Netherlands: We signed a contract with VDL NedCar regarding the production of MINI cars from 2014 on.
  • Brazil: You are aware of our decision to build a plant in Santa Catarina. This decision will entail an investment of 200 million Euros and the creation of 1,000 jobs. From 2014 on, we will be able to produce 30,000 units a year at the new site. With this addition, our global production network will comprise 30 locations in 14 countries.

Regarding the third point, brands and sub-brands:

Our premium brands BMW, MINI and Rolls-Royce are well known and strongly desired all over the world. In a recent customer satisfaction survey carried out by the German Automobile Association ADAC, the BMW brand came in first, MINI third.

Today, the BMW Group is a multi-brand company with three premium car brands, the two sub-brands BMW M and BMW i, plus the BMW and Husqvarna motorcycle brands.

At BMW Welt, this broad range is now also presented to the over two million guests who visit our brand experience and delivery center in Munich every year. Since October, BMW Welt has been the showroom for all of our automotive and motorcycle brands. We also offer visitors a chance to experience the strength of the BMW Group as a company.

To the fourth point, services and offerings:

The technological shift – the Iconic Change – in the automotive industry also requires innovative service offerings that allow us to address and acquire new customer groups.

DriveNow, the car sharing program we operate together with Sixt AG, already has 57,000 customers in Germany. With DriveNow, we provide innovative and sustainable mobility. This offering received the ÖkoGlobe award in October.

In summer 2012, DriveNow was also launched in San Francisco. With 70 BMW ActiveE cars, this is the very first full e-car fleet in premium car sharing.

We are shaping the future now to make sure that sheer driving pleasure will continue to be enjoyed by our customers, today and tomorrow. We have a clear direction towards 2020, which includes strategic investments in cutting-edge technologies.

At the same time, we remain disciplined with our costs and financial resources.

Sportiness and dynamics will also define future mobility. After all, they will always be a part of our DNA. In BMW’s first year back in the German Touring Car Championship, we won titles for the driver, the team and the manufacturer.

This just shows: Our motivation to succeed is what truly drives us as a team. This is what makes BMW, BMW.

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