Statement by Harald Krüger, Chairman of a Board of Management of BMW AG, Conference Call Interim Report to 30 Jun 2016

Ladies and gentlemen,


It has been scarcely 5 months given we presented to we the
discipline of a Strategy Number ONE NEXT, that form the
substructure for a destiny expansion of a BMW Group. Our goal
stays to go from a world’s heading provider of reward vehicles
and reward services to a heading mobility provider and tech company.


Our prophesy is clear: To be Number ONE. To enthuse people on a move.
To shape tomorrow’s reward particular mobility.


The doing of a devise is now good underway. On the
record side, we will be focusing on powertrain technologies and
digitalisation. On a use side, we will be selectively expanding
a patron offerings.


None of this would be probable but a clever financial base.
Profitability is a pivotal post of a strategy. For a past 25
quarters, we have achieved an EBIT margin in a Automotive Segment
within a aim operation of 8 to 10 percent or higher. Our strategy
will say this concentration on tolerable profitability – notwithstanding a
rarely flighty sourroundings and a constantly changing conditions we
work in. We will continue to essay for an EBIT domain of 8 to 10
percent in a automotive segment.


This will emanate a right conditions: to strengthen a confidence
placed in us by a shareholders and investors over a prolonged term, and
to be means to continue investing in a future.


We are assured that essential expansion means most some-more than just
being array one in sales and volumes – generally now that players in
a reward shred are increasingly regulating cost discounts to advantage a
rival edge.

The destiny viability of a association consists of several pivotal performance
indicators. In serve to a sales total this includes the
financial opening of a company, a strength of a code and
innovative drive. All these indicators denote a successful
long-term expansion of a company.


Our Strategy Number ONE NEXT provides a BMW Group with a
horizon for a actions adult to 2020 and 2025.


Today, we would like to concentration on dual pivotal points:

  • Where do we mount after a initial 6 months of 2016?
  • What are we doing to exercise a Strategy Number ONE  NEXT systematically?


As to a initial point: In a initial half of 2016, a BMW Group once
again remained a world’s heading reward automobile company. We delivered
some-more vehicles to business worldwide than ever before during a
six-month period: some-more than 1.16 million vehicles – an boost of 5.8
percent over a same duration of 2015. The BMW, MINI und BMW Motorrad
brands all reported new half-year highs.


Our pivotal financials for a initial 6 months are as follows: Earnings
before taxation of 5.17 billion euros – a 6.5 percent boost year-on-year
and a tip half-year gain in a story of a company.
Group net distinction rose to roughly 3.6 billion euros – another all-time
high. An EBIT domain in a Automotive Segment of 9.5 percent. This
demonstrates that: We sojourn on lane to grasp a targets for the
2016 business year.


Our proceed of equivalent sales opposite a vital regions continues to
compensate off. In Europe, a BMW Group was means to make clever gains. We
also reported expansion in Asia and China. As forecast, expansion in
China stabilised during a high level. Our sales total for a Americas
and a United States trended lower. Estimates advise that 17.5
million new vehicles will be purebred in a US in 2016. It seems
that a US marketplace has staid during this high level. We continue to
adjust a portfolio to a changing needs of business in a US, who
essentially select BMW X models.


Which leads me to a demeanour during a indication portfolio: In a initial half
year of 2016, direct for a BMW X1 and BMW 2 Series models was
utterly strong. With augmenting accessibility of all variants,
some-more and some-more business are now shopping a new BMW 7 Series. In June
alone, we sole some-more than 6,200 new BMW 7 Series. The initial 7 Series M
Performance indication will yield a serve boost. The BMW M760Li xDrive
will be launched in late 2016. Additionally, a plant in Dingolfing
has been shipping a plug-in hybrid chronicle of a BMW 7 Series since
early July. New orders for a 740e are already surpassing expectations.


In Germany, private people are especially a ones holding advantage
of a incentives for electric vehicles and plug-in hybrids. Here, the
supervision and a automotive courtesy are jointly covering a cost
of a incentives. The plug-in hybrid versions of a 2 Series and 3
Series and a BMW i3 will all advantage from a squeeze incentive.

I am happy to see that municipalities and institutions during the
informal and internal turn continue to set a good instance themselves.
They are display a flourishing seductiveness in a electric-powered vehicles.


Our designed prolongation of a iPerformance models of a BMW 740e,
BMW 330e and 225xe for this year is already sole out. We will respond
to this development. The BMW X5 PHEV is really successful in a US and
in several other European countries. Since a commencement of July, we
recover a entirely electric BMW i3 with 94 Ampere-hours. Our incoming
orders in Europe have increasing significantly. One month after the
launch we have already perceived 7,158 orders for a i3 with 50
percent operation increase. That is 5,190 some-more pre-orders than for a BMW
i3 with a initial era battery during a same time after a launch
in 2013.


This proves that when technical conditions and a right regulatory
horizon are aligned, electric-powered vehicles suffer greater
popularity. The Netherlands, for example, has been promoting
e-mobility for utterly some time. In June, BMW i and iPerformance models
accounted for roughly 15 percent of all BMW vehicles sole in the
Netherlands. Worldwide, we delivered some-more than 23,600 BMW vehicles
with an electric expostulate sight or as PHEV in a initial half of a year.
This is an boost of 87 percent compared with a initial half year
2015. Through May this year BMW accessible a strongest extensive growth
in a reward shred of electric-powered vehicles.


Moreover, in this duration BMW scarcely doubled a energetic expansion of the
whole PHEV and BEV reward segment. Systematic substructure of our
swift is a core principle of a Strategy Number ONE NEXT.


We also are operative together with open partners and other
organisations in several markets to enhance charging infrastructure.
This now includes China and a US. In New Zealand we aim to
implement a extensive network of renewable energy-powered charging
stations with internal partners for BMW I vehicles.


That brings me to my second point. We have a transparent objective: to be
a record and creation personality for particular mobility in the
digital age. To grasp this, we are substantiating selected
partnerships. Together with Intel and Mobileye, we aim to rise the
record for unconstrained pushing within 5 years. All three
partners will pool their expertise in a fields of automotive
engineering, technology, mechanism prophesy and appurtenance learning.


With a BMW iNEXT, we aim to have a resolution for rarely and
fully-autonomous pushing prepared for array prolongation and on a market
in 2021. For us it has always been clear: The reserve of drivers,
passengers and pedestrians stays a tip priority. As we stated
before, a record for entirely unconstrained pushing is not nonetheless fully
mature. We will also need a transparent authorised horizon to accompany the
introduction of this technology.


Our Strategy Number ONE NEXT enables us to rise a own
roadmap for unconstrained driving. The initial step was a merger of
a mapping use HERE with other German reward automobile companies. The
second step will be a partnership with Intel and Mobileye.


Expansion of a mobility-related services is another constituent part
of a strategy. Our car-sharing use DriveNow now has more
than 650,000 members, with some-more than 4,700 vehicles in 10 cities.
Over a entertain of a DriveNow swift in Europe is done adult of electric
vehicles. This array will continue to grow.


In a US, we have launched an extended car-sharing use in
Seattle underneath a code ReachNow. 500 BMW and MINI cars are currently
available. An additional 20 percent of a swift is done adult of BMW
i3s. We devise to enhance ReachNow to other cities in a United States.


Ladies and Gentlemen,


As we can see, there are many opposite fields of activity and
business opportunities we are intensively pursuing. Our Strategy
provides a discipline to keep us on march in flighty times and
equivalent destiny uncertainties in a business environment. These future
technologies and new services naturally need a high turn of
investment. We will continue to pull on a possess resources to grasp this.


For me, there is no “either/or” between a benefaction and a future:
The strength of a core business now is a substructure of our
destiny success. All 3 of a brands have an appealing line-up,
with extensive technological diversity. Additionally, a global
automotive marketplace should continue to grow in 2016. All these factors
make us confident for a business year 2016.


Our opening targets sojourn unchanged: A slight boost in
automotive sales – to grasp another all-time high. A slight increase
in gain before taxation – that would be another best for a company.
And an EBIT domain in a automotive shred within a aim range
of 8 to 10 percent.


This superintendence assumes, as always, that domestic and business
conditions sojourn stable. However, we are all now experiencing
only how fast and essentially things can change. Economic growth
and domestic fortitude in a universe positively can't be taken for granted.


With a BMW, MINI and Rolls-Royce Vision Vehicles, a BMW Group has
sent a transparent message: We are moulding a mobility of a benefaction and
a future. Our centenary jubilee debate “The NEXT 100 YEARS” will
interpretation in Los Angeles after carrying been in Munich, Beijing and
London. In Oct we demeanour brazen to presenting a VISION 100 vehicle
for Motorrad. It would be good to see we there and to offer we a
full design of a BMW Group’s prophesy of a future.


Thank we for your attention.