BMW Group To Establish Subsidiary in the Philippines

From 1 April 2001, BMW AG will establish a new subsidiary to assume
direct responsibility for the Philippines market. The new company, BMW
Philippines Corp., will be the first Filipino subsidiary of a carmaker
in the luxury-performance segment. In announcing this news, Mr Lueder
Paysen (Senior Vice President, BMW Group Sales Division) said at a
media conference in Manila today that BMW firmly believes that the
Philippines has great long-term potential which can only be realised if
one makes a long-term commitment. And this kind of commitment should be
made when the market is developing, not when it's fully developed, he
added. BMW Philippines is a 70:30 joint venture between BMW and Mr Jose
Ch. Alvarez, who owns Asian Carmakers Corporation (ACC), the current
BMW importer. ACC also continues to be BMW's partner in the
local-assembly of BMW models. 'This combination of a global car
manufacturer bringing its vast experience in automobile development and
marketing, together with the intimate local knowledge of a Filipino
entrepreneur, provides the ideal foundation for a partnership to fully
develop the opportunities in the Philippines', Mr Paysen said. BMW
Philippines is responsible for a market where nearly 1,000 BMW cars were
sold annually in the years 1996 and 1997 and more than 4,300 BMW
vehicles are in use. Mr Mark Gilbert (48), the President of BMW
Philippines, has a team of 30 associates, the majority of whom are
recruited locally. In his speech at the media conference, Mr Gilbert
said BMW Philippines has a number of ambitious targets. These include
maintaining the number one spot in the top segment of the local car
market, expanding the model range to include such highly sought-after
models as the BMW X5 and delivering visibly superior service to
customers. 'We are also looking at bringing our famed BMW motorcycles
to the Philippines, as well as the MINI, the world?s most loved small
car and a brand which belongs to BMW and is developed as a separate
brand in its own right,' he says. 'By expanding our model range here,
we will also boost our sales and expand the segment we are operating
in.' 'We will further develop the sales and service network, both
qualitatively and quantitatively. Gilbert adds, 'existing facilities
will be upgraded, while new dealers could be appointed for promising
regions outside Metro Manila such as Alabang, plus the provinces of
Cebu and Davao for example.' On the decision to invest directly in the
Philippines now, Mr Paysen said the decision to form a wholesale
company is part of a long-term strategy and should not be based on the
current economic climate, especially when looking at a developing
market which has future potential. In addition, to tap into this
potential, BMW has to make investments and commitments now to prepare
the ground for when the market expands. Continuing, Mr Paysen said
that working consistently through its own sales subsidiaries
established initially in the world's largest markets, BMW has been
pursuing a global strategy ever since the '80s. The list of markets
handled directly by the BMW Group ranges from the largest single
markets in Europe all the way to Australia, South Africa, South Korea,
and Thailand. In 1981, BMW became the first European car maker to
establish its own subsidiary in Japan, which was generally considered a
closed market. Last year, more than 36,000 BMW cars were delivered to
Japanese customers. In 1994, BMW Korea was set up, the first foreign
car maker to form a subsidiary there, pushing sales up from about 200
units a year to over 1000 units in two years. In 1997, BMW Thailand
started operating, the first Thai subsidiary of a European car company.
And in the following year, in the middle of the Asian crisis, BMW AG
announced that it will build its first wholly-owned plant in Asia to be
located in Thailand. Since then, BMW clinched the top position among
luxury cars in Thailand in 1999 and 2000 as well. The first cars from
BMW Thailand Manufacturing also started rolling out last year. The
objective in the current phase is to efficiently develop additional
markets with a growth potential, for example in the Philippines. A
second aspect of this sales strategy is to follow the development of
markets through direct, local production activities: The most recent
example in this context is the BMW plant in Thailand, which started
operations last year. On a worldwide basis, the BMW Group ended the
year 2000 with a new sales record for BMW cars. Altogether, more than
822,000 vehicles were supplied to customers worldwide, which represents
an increase of 9.4 percent over the previous year (751,272). Deliveries
of BMW motorcycles also set new records. Altogether, around 74,500 BMW
motorcycles were sold in the year 2000, representing an increase of
over 14 percent over the previous year (65,168 units). * For the
speeches of Mr Lueder Paysen and Mr Mark Gilbert, please download the
attached documents.