Statement Harald Krüger, Chairman of the Board of Management of BMW AG, Sneak Preview Model Year 2018, Strategy Update

Ladies and Gentlemen,

 

The BMW Group is always looking forward.

For me, two things are certain: Premium is future-proof. And the BMW
Group is future-proof.

 

Why is that so? Because we do not just make promises – we deliver on
them. That is true:

 

  • for our model offensive.
  • for electro-mobility and autonomous driving.
  • for our profitability.

 

 

Coming to my first topic: The biggest model offensive in our
company’s history is well underway. 2017 and 2018, we will launch 40
new and revised models. And that’s not including motorcycles! This
also means that the new drive train technologies are being
systematically introduced to our portfolio.

 

Our model offensive kicked off with the new BMW 5 Series. We have
sold more than 300,000 BMW 5 Series by the end of November. We
reclaimed the top position in the relevant segment since October. We
are rounding out our 5 Series range with the new M5. It succeeds the
M760 Li as the fastest BMW series-production model.

 

Further examples this year include: At BMW the revised 1 Series, 2
Series Coupé and Convertible and 4 Series, the new 6 Series Gran
Turismo and the new X3. The X2 will follow shortly.

 

In our BMW i family: the updated i3 and the sport version i3s.

 

At MINI: the new Countryman and its plug-in-hybrid version as well as
the first battery-electric concept.

 

At Rolls-Royce: the eighth generation of the legendary Phantom in the
next weeks.

 

At BMW Motorrad: 14 new and revised models.

 

All these new models represent our model offensive. In 2018, we will
enter Phase II. Luxury plays an important role in it. The luxury
segment is our “home turf”. In 2018 we will significantly enlarge our
offer in this profitable growing segment:

  • the Rolls-Royce Phantom.
  • the i8 Roadster.
  • the 8 Series Coupé.
  • the BMW M8.
  • the X7.
  • at BMW Motorrad, the K1600 Grand America – luxury on two wheels.

 

These are our goals for the luxury class over the next few years: A
higher segment share. A significant increase in sales and revenues.
The shared identity of our top models is reflected in the new
Bayerische Motoren Werke signet.

 

Our model offensive is also an X-offensive. BMW is a pioneer and
trailblazer in SAVs. We have sold almost five-and-a-half million BMW X
vehicles since 1999. Today, about a third of BMW sales are X models.

 

The segment is growing in all major global regions. That is why I
call 2018 the year of the “X”! The cool X2 in the compact segment and
the X7 in the luxury class are great examples. The new X3 is entering
its first full year. And the new X4 will be launching shortly.

 

And: Systematic electrification of the successful BMW X family
continues: The X5 has already been available as a plug-in hybrid for
some time. In China we are producing an electrified long wheel-base
version of the X1 for the local market. In 2020 we will launch the
fully electric X3. In it, X and i come together.

 

Our i story enters the next round! Going forward, all electrified BMW
models will be under the BMW i brand. And I can tell you one more
thing: We have not only secured the naming rights for BMW i – from i1
to i9. We also hold the rights for BMW X – from iX1 to iX9.

 

Coming to my second topic:

Our clear strategic focus is on electrification and autonomous driving.

 

We will deliver our 100,000th electrified vehicle before Christmas.
That was my clear goal for 2017. And I assure you: For 2018 we will
set ourselves a new goal.

You can measure our success on this basis. This is what I stand for.

All in all, we currently have 200,000 electrified vehicles on the
roads: More than 90,000 of them are fully-electric BMW i3s. Our
line-up of plug-in-hybrids sets the benchmark – from MINI to the BMW 7 Series.

 

Electro-mobility attracts new customers. The BMW i3 and the BMW i8
have conquest rates of well over 80 per cent. Interestingly, who once
buys electric, stays with electric. We only have to convince customers
to “go electric” once.

 

The fifth generation of storage and battery technology will make
e-mobility attractive for longer distances. Thanks to the scalable
electric modular systems, from the beginning of the next decade, it
will be possible to fit all model series with any drivetrain,
according to demand.

 

The BMW i Vision Dynamics will have a range of 600 kilometres in a
car with strong emotional appeal. Electro-mobility and BMW are the
perfect fit.

 

By 2025, we will offer 25 electrified models, including 12
fully-electric cars. We do not include so-called mild hybrids in this number.

 

You know our roadmap:

  • in 2019 an all-electric MINI.
  • in 2020 the mentioned battery-electric version of the X3.
  • in 2021 the iNEXT.

 

Last week, we held the symbolic ground-breaking for our new Battery
Competence Centre here in Germany. We see ourselves as a systems
provider for e-mobility.

 

That also includes charging:

  • ChargeNow is the leading public charging service worldwide. By the
    end of the year, customers will have access to more than 130,000
    charging points in 29 countries.
  • We also helped establish the European high-power charging network, Ionity.
  • In 2018, we will introduce inductive charging with the BMW 530e iPerformance.
  • We have also created a new digital business segment with the name
    BMW Energy Services. The aim is for e-mobility to ultimately be
    completely emission-free.

 

We also do autonomous driving the BMW way: Autonomous means premium.
Autonomous means safety. We work together with strong partners.

 

At our new campus in Unterschleißheim, near Munich, more than 2,000
engineers will be working on autonomous driving. Our autonomous test
vehicles are already in action around the world. A fleet of 40 BMW 7
Series will be on the roads at the end of the year – in Munich,
California and Israel. 

 

Partially-automated systems are already installed in our vehicles
today. In the BMW 5 Series, you can already take your hands off the
wheel for a defined period of time. We are rolling these functions out
across the fleet.

 

Autonomous driving will take the mobility experience to a whole new
level. The display and operating concept with personalised information
will play an important role. We already launched the first
ConnectedDrive services in the late 90s. We now have 10 million
connected vehicles on the roads. As of November, our customers can use
Skype for Business and starting this December BMW Connected will also
be integrated with the Google Assistant.

 

Mobility services complete our business model. Today, our service
ReachNow was launched in China.

 

Digitalisation will also change how we work. We will become more
agile, anticipate faster and become more adaptive. At our Campus in
Unterschleißheim, for example, we are already using new working
models, such as Large Scale Scrum, interdisciplinary teams and
end-to-end processes.

 

 

Ladies and Gentlemen,

 

The BMW Group stands by its goals. We deliver! You can rely upon this.

 

That is also true for our profitability – my third topic. This is the
basis for our transformation.

 

In the first nine months of 2017, we have allotted more than 700
million euros more in research and development than in the previous
year. Also next year our RD ratio will further increase: from
about 6% in 2017 to between 6.5 and 7% in 2018. After 2018, it will
settle back down towards its current level.

 

More technology in the vehicle means higher costs as well. We are
compensating for this through increased performance and efficiency
gains. We want to internally finance all relevant upfront investments.
We decide ourselves the path we are taking.

 

We are on course to meet our goals for 2017 – despite the volatile
environment and added challenges, such as the diesel debate in Germany
and Great Britain.

 

I promise: We will remain a highly flexible, forward-looking company.
That is why financial stability and health are so important to us.
They will serve us well during our transformation into a tech company.

 

Thank you for your attention.

 

 

Consumption and Emission Data.

 

  • BMW i3: fuel consumption combined: 12,9 kWh; CO2 emissions
    combined: 0 g/km
  • BMW i3s: fuel consumption combined: 14,3 kWh; CO2 emissions
    combined: 0 g/km
  • BMW i8 Coupé: fuel consumption combined: 1,9 l/100km; CO2
    emissions combined: 42 g/km; electric power consumption combined:
    14,0 kWh/100 km
  • BMW i8 Roadster: fuel consumption combined: 2,1 l/100km; CO2
    emissions combined: 46 g/km; electric power consumption combined:
    14,5 kWh/100 km
  • BMW M5: fuel consumption combined: 10,5/100 km; CO2 emissions
    combined: 241 g/km
  • BMW M760Li xDrive: fuel consumption combined: 12,8 l/100 km; CO2
    emissions combined: 294 g/km
  • Rolls-Royce Phantom: fuel consumption combined: 13,9 l/100km; CO2
    emissions combined: 318 g/km

 

Fuel consumption figures based on the EU test cycle, may vary
depending on the tyre format specified.

Further information on official fuel consumption figures, specific
CO2 emission values and the electric power consumption of new
passenger cars is included in the guideline “Guideline for fuel
consumption, CO2 emissions and electric power consumption of new
passenger cars”, which can be obtained from all dealerships, from
Deutsche Automobil Treuhand GmbH (DAT), Hellmuth-Hirth-Str. 1, 73760
Ostfildern-Scharnhausen and at http://www.dat.de.