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Speech by Dr Helmut Panke

BMW Group Press Evening, Geneva Motor Show, 28 February 2005


Dear Ladies and Gentlemen,
It is my pleasure to welcome you to tonight's press evening here at the 'Bâtiment des Forces Motrices'.

You may have noticed it on our invitation and see it confirmed here again on the backdrop: The evening before the Geneva Auto Salon with the BMW Group is devoted to our core models - especially the BMW 3 Series.

Both of the following statements are central to this:

1. The BMW Group's core model series have contributed strongly to the Company's development into its new dimensions up to today.
2. The BMW Group's current product initiative focuses not only on new models in new segments, but also has as its goal continuously enhancing the attractiveness of our core model series and thus generating growth.

Let's move to our first point. The significance of our series of core models can be determined with specific facts:

· When we introduced the first generation of the BMW 3 Series onto the market 30 years ago, we had just reached a new record number of employees, at 29,000. Today, in contrast, the BMW Group employs almost 106,000 employees worldwide.

· Total sales for BMW for 1975, including all model series together, was slightly more than 226,000 automobiles. Last year, we sold more vehicles of the BMW 5 Series alone. In 2004, we sold almost twice as many BMW 3 Series cars - 450,000 vehicles. And in 2004 we also sold around 48,000 of the BMW 7 Series.

· Counting all three core model series together, last year we sold more than 727,000 vehicles, with the BMW 3, 5 and 7 Series together. This amounts to 71 percent of total sales of the BMW brand and is almost as many vehicles as the BMW brand sold in 1999 across all model series.

Naturally, the Company's growth and its continuing internationalization are not just due to the success of the three core model series. We have developed further in many areas over the past 30 years. In recent years, we primarily expanded successfully with our brand and product portfolio. Furthermore, the success of the past 30 years is closely linked to the BMW 3, BMW 5 and BMW 7 Series. They are the strong pillars on which we stand.

With each new generation of these core model series, we have managed to continue growing in sales over the lifecycle, while improving our position in the respective segments:

· For example, the BMW 3 Series was segment leader in its class from the start. Over the past 30 years many of our competitors have tried to challenge us for this position, but none succeeded. The BMW 3 Series has steadily held the No. 1 position in this segment of premium sedans for 30 years.

· The BMW 5 Series established itself over the years as a fixed entity in its segment. The 5 Series continues to set the technical standard with business sedans. Examples of the current generation are the Active Steering, Head-up Display and Dynamic Drive. Sales of the 5 Series, at around 229,600 vehicles last year, marked a new record for the BMW 5 Series. We have never sold more vehicles of this model series in one year.

· The BMW 7 Series is showing strength as well. The fourth generation of this model series has been more successful than all its predecessors. In the first 38 months since its market introduction, we delivered 160,000 vehicles to customers worldwide. This is 8 percent more than the predecessor model in the same time period. Here, the BMW 7 Series performs well in all relevant markets. Thus, retail today is almost equally distributed across Europe, America and Asia, with one-third each. This is a significant success in our view: The BMW 7 Series took on market leadership in our German home market last year - a success that is also greatly respected abroad.

Dear Ladies and Gentlemen,

Time and time again we have pointed out that the BMW Group's goal is to grow and expand at the same time. And in doing so, we also made it clear why we make a distinction in this regard.

'Expansion' has to do with the new models in the new segments into which we are expanding our product portfolio. Last year, in particular, we introduced more new model series than ever before. I just recall the BMW 1 Series, the BMW 6 Series and the BMW X3. The MINI Convertible was another example of the BMW Group pushing forward with new products, into segments in which we either had never or no longer had a presence.

In contrast, 'Growth' refers to our established model series, such as our core model series.

We introduced our new BMW 7 Series to the market in the fall of 2001. In 2003 followed the new BMW 5 Series.

Now we are introducing the next generation of the BMW 3 Series to the market. And at the same time we are also offering our customers a model update of the current BMW 7 Series.
We will thus have updated all three established core model series of the BMW brand. And that's not all: With all our three core model series, we are offering our customers very modern, attractive vehicles that are either still at the beginning of their lifecycle or are absolutely at their peak, due to a model update.

One must naturally assume that the share our core model series hold of total retail volume of the BMW brand will continue to decline. What is responsible for this is the success of our new model series, with which we are expanding. Certainly, the share in total sales is not decisive in and of itself. It depends on continuous growth throughout the entire lifecycle, in all model series.

Dear Ladies and Gentlemen,

The BMW 3 Series naturally still plays a special role within our core model series. Most recently - in the 2004 business year - the BMW 3 Series contributed to around 44 percent of total retail of the BMW brand. It is therefore currently the strongest selling model series in the product portfolio of the BMW Group overall.

In 2004 we sold around 450,000 vehicles of the BMW 3 Series. More than half of them - over 235,000 vehicles, were sedans. Last year slightly more than 223,000 vehicles were registered in the entire Canton of Geneva. In other words, if we had sold all of our BMW 3 Series Sedans in the Canton of Geneva last year, every automobile on the streets here today would be a BMW 3 Series Sedan.

Even this comparison is telling: The BMW Group has sold a total of 9.5 million automobiles of the BMW 3 Series worldwide since 1975. This is - according to the Association of the German Automobile Industry - more vehicles than all German automobile manufacturers together produced worldwide in a year lately.

In view of such comparisons, it becomes clear what significance the introduction of the fifth Generation of the BMW 3 Series has for us. Since its market introduction in 1998, worldwide we have sold around 1.9 million vehicles of the previous 3 Series Sedan. We are very optimistic that we will surpass this figure with the new BMW 3 Series Sedan, throughout its lifecycle.

Tomorrow, this vehicle will celebrate its world premiere at the Auto Salon here in Geneva and tomorrow will also mark the production start of the new BMW 3 Series in our new plant in Leipzig.

Some of you have already had an opportunity to become familiar with this new model at our event in Valencia. You can rest assured that this new sedan will offer everything necessary to become the best and most successful BMW 3 Series of all time.

Those of you who have not yet been so fortunate as to become thoroughly familiar with our new BMW 3 Series Sedan are invited to catch up this evening.

My colleague, Burkhard Göschel, will now introduce the new vehicle and also present some very interesting facts on the development of the BMW 3 Series over the past 30 years.

After that time, my colleagues on the board of management and I will be available for discussion.

Until then, I thank you for your attention.

source: BMW Press
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