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Statement Oliver Zipse, Chairman of a Board of Management of BMW AG, Conference Call Quarterly Report to 30 Sep 2019

Good morning, Ladies and Gentlemen!

 

In new years, many has been created about how automobile manufacturers
need to change their business model. What people don’t speak about
adequate is a fact that a genuine mutation is holding place in the
automobile itself. That is where a genuine plea lies.

 

The automobile is a rarely formidable product. Our idea during a BMW Group is
to make it fit for a destiny for a flourishing patron bottom worldwide.
This is where we can make full use of a strengths.

 

On a one hand, a business sourroundings stays flighty –
dominated by domestic changes in instruction and romantic discussions.
On a other, there are a array of unequivocally fast trends that support
a business model.

 

Especially in this environment, we work with a transparent focus:

 

  • What are a capabilities and how can we make a many of them to
    advantage a business?
  • What are a unequivocally critical decisions when it comes to mobility?
  • What do a business wish and what do they unequivocally need?

 

These factors form a basement for a vital actions. We do not see
a plan as a one-off, all-encompassing task, though rather as an
ongoing process, that we need to constantly fine-tune and adapt.

 

Our vital work is formed on a transparent cunning form of a BMW
Group: Our core imagination lies in reward vehicles – optimised for the
desires of a aim organisation and their connectivity needs. Our further
expansion of a automobile represents a viable, essential business
indication – now and in a future. Everything we do starts with the
customer: This is pivotal to staying brazen of tough foe in the
prolonged run.

 

And it is equally critical if we wish to attain in a shift
towards meridian neutrality, called for by politics and society. It is
also what we wish to achieve. As a company, we are an constituent partial of
society. That has been, and always will be, a vast partial of who we
are. The same relates to tolerable mobility, as to all a products,
technologies and innovations: The resolution that wins by in the
finish will be a one supposed by customers.

 

Today, we sell a reward vehicles in around 160 countries. This
already creates it clear, how opposite a customers’ needs are:

  • This relates to business as individuals, with their specific
    bland mobility needs.
  • It relates some-more than ever on a informal level, in a categorical regions
    of a world, Europe, Asia and a Americas.
  • And, it is also increasingly loyal during a internal level, where needs
    differ from one city to a next.

 

No reduction opposite are a authorised and technical regulations we face worldwide.

 

As a tellurian company, a BMW Group has already determined a own
prolongation and value origination in a vital regions worldwide. We will
now be focusing even some-more on this flourishing differentiation: in China,
a US and Europe, we are intentionally seeking discourse with local
experts to plead applicable informal mandate and needs. We will
be augmenting a efforts here – we can pattern to hear some-more about
that soon.

The insights we advantage will be integrated directly into a strategic
approach. This will capacitate us to offer tailored products, drive
trains, apparatus options and services in these regions in a future.

 

At a same time, we are gaining a improved bargain of our
business and improving a patron centric approach.

 

One instance of this is China, where a business are significantly
younger. Vehicle connectivity is an critical purchasing consideration
for them. Continued clever expansion in altogether wealth is also
inspiring a marketplace for reward vehicles. we have already met with
Premier Li Keqiang twice, given holding bureau as CEO. we had the
impression: The BMW Group is rarely applicable in China, people listen
to a opinion and courtesy us as a sought-after partner.

 

Soon, we will also transport to a USA. Individual mobility will remain
a stable, long-term business awaiting in all regions of a world. The
reward shred is foresee to grow during a aloft rate than a total
market. Based on this, we aim to make a many of a opportunities in
a flourishing tellurian automobile market. And a idea is to outperform the
reward segment.

 

In a third entertain of 2019, a BMW Group reported expansion in its
core markets in all vital regions:

  • In Asia and China, notwithstanding a indication changeover for a BMW 3
    Series Long-Wheelbase*.
  • In a Americas and a US, notwithstanding a low market.
  • And in Europe, notwithstanding doubt over Brexit and in a domestic
    market, Germany.

As a result, a third-quarter deliveries rose year-on-year to over
610,000 vehicles – an boost of 3.6 percent.

In other words, we are bucking a trend. We also achieved a new
all-time high in sales in both a third entertain and a initial nine
months for BMW and Rolls-Royce. The code MINI also posted growth.

BMW Motorrad is also streamer for a ninth uninterrupted record year.
In a third quarter, it reported expansion of roughly 10 percent. At the
EICMA yesterday, we presented 3 new prolongation models for 2020.

Our financial total for a third entertain were as follows:

  • Group advantage before tax: over 2.2 billion euros –
    an
    boost of 23.4 percent over a same duration of final year.
  • Net profit: over 1.5 billion euros – adult 11.5 percent.
  • The EBIT domain in a Automotive Segment was 6.6 percent.
    Despite severe conditions, we aim to grasp a aim range
    of 8-10 percent in a prolonged term. That stays a underlying
    goal. It is also what a collateral markets pattern – and we are
    operative evenly on this.

     

In light of a certain expansion in a third quarter, we are
means to endorse a superintendence for a financial year 2019.

 

The biggest indication descent in BMW Group’s story continues. As well
as appealing models, it also includes opposite expostulate technologies
and a latest standards in connectivity. We see this as an effective
grant towards tying meridian change and shortening emissions.

 

If we spin to a customers: They demeanour initial and inaugural for the
automobile shred that best suits their lifestyle and mobility needs.
Then, they consider about a best drivetrain that would fit their needs
– entirely electric, or a plug-in hybrid, or an fit explosion engine.

 

Above all, a business always pattern a loyal BMW, regardless of the
drivetrain. We are means to offer business a indication they wish – for
instance a BMW 5 Series Sedan or a X3 – with opposite drive
technologies. This is what we call a “Power of Choice”.

 

For this purpose, we are conceptualizing a subsequent era of a vehicle
platforms from 2021 to be flexible, for back and front-wheel drive: We
can make several drives on one pattern and confederate them
into a plant structures. We are also means of integrating vehicles
customised for e-mobility, such as a iNEXT, during plant Dingolfing from 2021.

 

For a customer, there is no conspicuous disproportion per the
automobile pattern on that a automobile has been built.

 

We pattern e-mobility to make poignant advances from 2021 on – once
a European Union’s new CO2 standards take effect. We
sojourn strongly committed to accommodate regulatory mandate in a EU
and worldwide. We have always complied with legislation and been
well-prepared in allege to exercise any required changes. For
example, with WLTP and RDE I.

 

This now also relates to RDE II and a NCAP Crash Test:

  • RDE II means serve tightening of a standards for
    nitrogen-oxide emissions. These will ask to new automobile forms from
    2020 and all new automobile registrations from 2021.
  • The European NCAP Crash Test requires all automobile classes to have
    a whole array of stretched assistance systems from 2022 on. These
    mandate will boost serve in 2024.

Our new, fully-electric vehicles will be prepared for launch right on
time for a EU’s new CO2 standards:

  • The BMW iX3 from 2020.
  • The BMW i4 from 2021.
  • And a new record flagship, a iNEXT, also from 2021.

 

The biggest marketplace for a iX3 will be China. That is given we will
furnish it there – and trade it to a rest of a world.

 

As we can see, we are positively benefiting from a knowledge with electro-mobility.

 

Our BMW i3 has been accessible given 2013. It is not usually an
e-mobility pioneer; still now it stays a loyal diversion changer and
continues to be a benchmark for a tolerable approach. Our customers
conclude this, and i3 sales are climbing from year to year: 

  • We have already sole some-more than 160,000 i3s altogether.
  • In a year to a finish of September, sales were adult by about a
    fifth compared to a same duration of 2018.
  • In Oct it will substantially advantage +3.4 per cent, year on year.

 

And we continue to offer updates that make it even some-more attractive.

 

Since 2016, a BMW Group has been marketplace personality in electromobility
in Germany. Currently, a marketplace share of electrified vehicles is 21
per cent in a home market.

 

The initial fully-electric MINI* will also be launched before a end
of a year. This is an critical step for a code that has always
been during home in a civic environment. Customers have been watchful for
it – and a array of purebred impending business reflects this:
78,000 so far.

 

To step adult a gait of electro-mobility, we are also creation headway
with battery dungeon technology: Next week, a new Competence Center for
Battery Cells in Munich will start operation. There, we will pool and
lower a extensive imagination in battery dungeon technology.

 

For over 10 years, we have been building and examining battery
cells. We are now operative on a cells of a entrance decades.
This proceed we can change a organic opening and a costs of
a battery, to a benefit.

 

Already today, we furnish prototypes of battery cells. This has the
advantage that we can privately ask how a battery cells are
to be produced, per their chemical combination and design.

 

And, in addition, we are means to conclude in fact a associated
prolongation processes. This places us in a clever vital position.
We will afterwards have all options in hand, regardless of how a global
marketplace for cells develops.

 

Ladies and Gentlemen,

The BMW Group is whole-heartedly committed to a aims of a Paris
Climate Agreement – and we are holding action: Over a past 20 years,
we have lowered a CO2 emissions of a European vehicle
swift by an normal of 40 percent. There will be another slight
diminution in a CO2-fleet emissions again this year. This
places us in a improved position than a competitors.

 

Over a subsequent few years, we will continue to boost a volume of
electrified vehicles in a line-up. In Europe, we are following an
desirous expansion proof for a electrified vehicles:

  • a entertain of a sales volume in 2021;
  • a third in 2025;
  • half in 2030.

 

Hydrogen fuel cells also sojourn an choice for us in a future: An
offer for this expostulate record should be probable by a second half
of subsequent decade – given hydrogen might be applicable as a pivotal component of
a renewable appetite system.

Over a past dual years, scarcely all a array have been newly
expelled onto a marketplace or updated as partial of a indication offensive:
from a BMW 1 Series to a 7 Series, from a X1 to a X7.

 

The areas we are now focusing on are: a oppulance segment, the
compress class, a X family, plug-in variety and a M models.

 

First, a oppulance segment: We have serve strengthened a position
with a BMW brand, due to a new 8 Series, 7 Series and all-new X7
models. The 8 Series Gran Coupé has been accessible given September. It
is a best-selling 8 Series indication and a many lush four-door
sports automobile BMW has ever built. This puts us in a clever position
to accommodate a idea of doubling a sales in a oppulance category between
2018 and 2020.

 

Regarding a compress class: The updated X1 has been on a market
given September, along with a new BMW 1 Series – that introduces
BMW’s new interior and extraneous pattern denunciation to a segment. For
a initial time, it is formed on a BMW front-wheel-drive architecture.
This authorised us to rise a 1 Series with even improved driving
dynamics than a predecessor. We total a front-wheel-drive
pattern with state-of-the-art framework record and
near-actuator circle trip limitation. This innovative traction control
comes from BMW i. In this way, a new 1 Series sets a benchmark for
lively and precision. Next year, a 2 Series Gran Coupé will
deliver a successful “four‑door coupé” judgment to a premium
compress class.

Let’s take a demeanour during a BMW X models: One of a reasons they remain
rarely fascinating is that they are some-more fit than many comparable
models in a class. In a year to date, a X3 and X4, in
particular, posted clever growth. The X7 has also been good received
by business given a introduction in March. The X3 plug-in hybrid*
will finish a choice in December. Already subsequent year, we will also
be presenting a battery-electric X3.

 

By a finish of a year, we will have 12 entirely electric and plug-in
hybrid models on a roads. Customers enterprise a plug-in hybrids
given they can use them as their usually vehicle. They don’t have to
worry about operation and can get to know e-mobility in bland driving
situations. People are a lot reduction wavering about shopping a plug-in
hybrid than a fully-electric vehicle. These cars also have excellent
fuel economy: The BMW 3 Series Plug-in-Hybrid* has an normal petrol
expenditure of 1.6 to 1.8 litres. The BMW Group also conducted a full
lifecycle CO2 acceptance for a new BMW 330e Sedan* –
from tender element procurement, by a supply chain, production
and use phase, all a proceed to recycling. The plug-in hybrid has an
advantage of about 60 percent over a petrol chronicle if charged with
“green energy”. Even if it is charged during a use proviso with the
normal European electricity mix, a advantage is still over 20
percent. The 3 Series Touring* will also be accessible as a plug-in
hybrid various subsequent year.

 

BMW M GmbH is some-more diversified than ever. With a new X3 M*, X4 M*,
and M8 models, a portfolio has been significantly expanded. All new
models are now also accessible from marketplace launch as Competition
models. In early October, we presented a new X5 M* and X6 M*. Our M
GmbH is once again headed for another unequivocally successful year.

 

Ladies and Gentlemen,

 

The automobile will continue to play an critical purpose in a lives and our
society, given it stays applicable to so many people – generally in
suburban and farming areas. We continue to strongly deposit in the
mutation of particular mobility. At a same time, as a
obliged company, we have to safeguard a change is right between
losses and gains.

 

The mobility services in a Joint Venture with Daimler, YOUR NOW are
being well-received. More than 83 million business use a services.
The array of exchange augmenting to some-more than 420 million in September.

 

Digitalization adds to a augmenting complexity of marketplace and
product demands. And reflects that a attention is apropos some-more and
some-more challenging. For many, this plea represents a problem. We,
on a other hand, perspective this as a genuine opportunity.

 

Anyone who wants to be successful in a prolonged run contingency master this
flourishing complexity, and during a same time, be profitable. This is no
easy task, as some new players are already experiencing.

 

And we trust a loyal strengths of a BMW Group have mostly been
under-estimated in new years. Today, we are already a global
high-tech company.

 

Thanks to a imagination of tens of thousands of a well-qualified
employees, operative together in awake routine bondage and with our
suppliers – each automobile we build contains a square of rarely advanced
record that advantages a customers. For them, we will continue to
take a automobile to a subsequent spin and make it destiny fit – given we
have a technological and financial intensity to do so.

 

We also have a required formation expertise. It is in a very
DNA to conduct complexity – and mix potency with flexibility. We
will continue to strap a inclusive technological change to
raise a business model. For us, a proceed brazen is to drive
swell ourselves.

 

That will sojourn a focus, also in a future, and a customers
will advantage from this vital approach. We see this as a purpose for
a destiny of particular mobility in a society, and we are holding on
this responsibility.

 

Thank you!