Statement Harald Krüger, Chairman of the Board of Management of BMW AG, Conference Call Interim Report to 30 September 2017

Good morning, Ladies and Gentlemen!

 

Our priority is the long-term perspective. For this reason, we are
investing substantially in all relevant future areas of mobility. At
the same time, we are maintaining a balance between the key
indicators: sales growth, profitability and investment.

 

We showed the direction we are taking the company at this year’s
Motor Show in Frankfurt: To become a technology company for premium
mobility and services. Our current focus is on e-mobility and
autonomous driving.

 

In both of these areas, we are concentrating and expanding expertise
at our home base in Germany. From here, we will drive the
transformation of our industry with our innovations. All our actions
for the future are built on a strong foundation of sustained
profitability. That is what differentiates us from new and established
competitors in the automotive sector. In a complex environment, we
continue to chart our own course.

 

Ladies and Gentlemen,

 

There are two topics I would like to focus on today:

 

  1. Our business development for the current year.
  2. Our progress in implementing Strategy NUMBER ONE NEXT.

 

Let’s start with our performance.

 

What did we achieve in the period between January and September 2017?

 

  • Group pre-tax earnings climbed to nearly 8.5 billion euros.
  • For the 30th consecutive quarter, our EBIT margin in
    the Automotive Segment remains within our target range of 8 to 10
    per cent.
  • At Group level, the EBT margin for the year to the end of
    September stood at 11.7 per cent.

 

These figures show that: Our products and services are in strong
demand. More than 1.8 million customers bought a BMW Group vehicle in
the year to the end of September. Our BMW, MINI and BMW Motorrad
brands each reported new all-time nine-month highs:

  • BMW: more than 1.5 million vehicles.
  • MINI: more than 270,000 vehicles.
  • BMW Motorrad: more than 127,000 motorcycles and maxi-scooters.
  • Rolls-Royce sold 2,343 cars and, therefore, did not match last
    year’s level. As you know, the Phantom did not have full
    availability this year.

 

At the Annual Press Conference in March, I announced the biggest
model offensive in our history: 40 new and revised BMW, MINI and
Rolls-Royce models this year and next. We are delivering on this!

 

For the BMW brand, we are renewing and expanding our highly
successful X family.

 

  • The third generation of the BMW X3 will be available as of
    mid-November. For the first time, we will be offering an M
    Performance version. From spring of next year, the X3 will also be
    produced in South Africa and, from summer 2018, in China. China is
    by far the most important market for this model, alongside the US.
  • The BMW X2 will follow in 2018. Its new and individual look breaks
    the mould. This model is not just new; the X2 is also different –
    and it is incredibly cool. We are sure that it will appeal to young trendsetters.
  • At the end of 2018 the BMW X7 will go into production. We
    presented the concept vehicle at the IAA. This vehicle will
    strengthen our offering in the luxury class. With its large surfaces
    and sharp lines, it also provides a glimpse of our future design.

 

We have sold a total of more than 5.4 million X models since 1999. X
models currently account for more than a third of BMW sales. We will
continue this success story with our new and additional X models.

 

From November, the BMW M5 will complete the new BMW 5 Series range.
BMW’s fastest series-production model offers all the benefits of a
business sedan. With individual vehicles like the new BMW 6 Series
Gran Turismo, we will also occupy important niche markets and win over
new customer groups. This model will also be launched this month. The
new Z4 Concept has been very well received by the media. We will be
presenting the series-production model next year.

 

We highlighted the full range of the MINI brand at the Frankfurt
Motor Show. From the sportiest MINI of all time, the John Cooper Works
GP Concept, to the MINI Electric Concept. As an urban brand, MINI has
always been destined for e-mobility. This is demonstrated by the first
MINI plug-in hybrid. We have sold more than 2,700 electrified
Countryman cars since June.

 

At Rolls-Royce, delivery of the new Phantom will begin in January
2018. We already have a large number of pre-orders. The eighth
generation of the Phantom is the pinnacle of luxury. Every detail can
be customised to the owner’s individual taste.

 

At BMW Motorrad, the new K 1600 B and new G 310 GS are now available,
following the wave of new models in spring. Our model offensive with
all brands is part of our Strategy NUMBER ONE NEXT.

 

That brings me to my second point: Our progress in implementing
Strategy NUMBER ONE NEXT.

 

In e-mobility, we are concentrating on three main areas:

 

  1. Electrification of our line-up.
  2. Expansion of charging infrastructure.
  3. Enabling our production network.

 

With electrification, we are already ramping up phase two:

 

  • Right now, there are more than 180,000 electrified BMW Group
    vehicles on roads all over the world.
  • At the end of October, I was at Plant Leipzig to celebrate the
    production of 100,000 BMW i3 cars.
  • In the year to the end of September, we sold a total of more than
    68,600 electrified vehicles. This was more than in the whole of 2016
    and reflects an increase of over 64 per cent.
  • This means we are on track to meet our goal of selling 100,000
    vehicles with electrified drive trains this year.
  • BMW remains the clear number one in plug-in hybrids in the premium
    segment. The new BMW 5 Series iPerformance is especially popular. In
    some markets, it accounts for a third of BMW 5 Series Sedan sales.
  • We will offer 25 electrified models in 2025; 12 of them pure electric.

 

Our BMW i family will become even better with the introduction of
attractive new models:

  • We have added another variant for the i3 – the sporty BMW i3s.
  • This will be followed by the emotional BMW i8 Roadster as a
    plug-in hybrid in 2018.
  • Our BMW i Vision Dynamics will take e-mobility to a new dimension,
    with a range of up to 600 kilometres. The media has been very
    positive about this four-door Gran Coupé.

 

To enable the wide-scale rollout of e-mobility, we are working to
expand charging infrastructure:

 

  • We have formed a joint venture with other manufacturers to create
    a rapid-charging infrastructure across Europe.
  • ChargeNow is currently the world’s largest public charging
    service. By the end of 2017, customers will have access to more than
    130,000 charging points.

 

The technological shift towards sustainable mobility is not
proceeding at the same pace and with the same intensity in all regions
of the world. That is why we are also aligning our global production
network to this development. We are creating flexible architectures
and using modular construction kits. This will give us the flexibility
to build electric drive trains, plug-in hybrids and efficient
combustion engines at our plants, based on demand, from 2020.

 

Germany plays a key role for us as a manufacturing location for e-mobility:

 

  • The BMW i Vision Dynamics will be built at our Munich plant.
  • Our new technology flagship, the BMW iNEXT, will be manufactured
    in Dingolfing.

 

Our second major focus topic, in addition to electrification, is
autonomous driving. We are also making rapid progress in this area:

 

  • At our campus in Unterschleißheim, near Munich, our first 500
    employees are already working together with colleagues from Intel
    and Mobileye.
  • Other strong partners – Fiat Chrysler Automobiles, Delphi,
    Continental and Magna – are helping enhance our open platform for
    autonomous driving.

 

Leaps in technology demand appropriate structures – and, not least, a
future mindset among all employees.

 

  • With the expansion of our FIZ Research and Innovation Centre in
    Munich, we will have an innovative working environment for 5,000
    employees by 2019.
  • We recently launched our new project “FIZ Future”, which will
    create completely new working environments there by 2050. We are
    already using new work methods – such as SCRUM or lean development
    in development and business IT – to support our transformation into
    a high-tech company and boost our profitability.

 

Ladies and Gentlemen,

 

After the first nine months of the current financial year, we are
confident of meeting our targets for 2017. We are targeting new
all-time highs for deliveries and Group earnings before tax. In the
Automotive Segment, the EBIT margin should remain within our target range.

 

However, it is also clear that the business environment is still
marked, to a large extent, by volatility and uncertainty. In all
markets, there is fierce competition for every customer and every
leasing contract. And on the political side, there are many unknowns:
The outcome of the Brexit negotiations between the European Union and
the UK; further developments in the Middle East – just to name a few.

 

And from the new German government, we would welcome open and
constructive discussions regarding important future topics. It is in
all our interests to enable Germany to pioneer new technologies.

 

In talking to analysts and investors at the Frankfurt Motor Show, we
received a lot of positive feedback on Strategy NUMBER ONE NEXT
and our model offensive. People recognise that we are tackling the
relevant challenges and coming up with viable solutions. The price of
BMW common stock has reflected this over the past few weeks.

 

I firmly believe that: The BMW Group will not just be part of the
industry’s transformation. We will lead it. That is the expectation we
have set ourselves. That is why we have increased the pace with
e-mobility and autonomous driving.

 

And we will continue to take a global, long-term view. We remain
committed to free and fair global trade: It guarantees prosperity and
progress. No one should underestimate the capabilities of our company,
nor our commitment to the next phase of the auto industry’s
development. We remain profitable. We are highly flexible. We are
taking advantage of all opportunities. We are leading the way in new technologies.

 

This is how we are creating the future. Thank you!

 

 

Consumption and Emission Data.

 

  • BMW X3 M40i: fuel consumption combined: 8,4 – 8,2 l/100 km; CO2
    emissions combined: 193 – 188 g/km
  • BMW M5: fuel consumption combined: 9,9 l/100km; CO2 emissions
    combined: 231 g/km
  • BMW i3s: electric power consumption combined: 14,3 kWh; CO2
    emissions combined: 0 g/km
  • MINI Cooper S E Countryman ALL4: fuel consumption combined: 2,3 –
    2,1 l/100 km; CO2 emissions combined: 52 – 49 g/km; Electric power
    consumption combined: 14,0 – 13,2 kWh/100 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.