BMW Group establishes sales subsidiary in Malaysia

As part of its Asia strategy, the BMW Group is considerably expanding
its involvement in Malaysia. The establishment of a sales joint venture
with the Group's local partner Sime Darby Berhad forms the core of this
involvement. In addition, the company has set up a new IT centre for
the Asia-Pacific-Oceania region in Kuala Lumpur. The Group's
involvement in Malaysia is rounded off by a new regional parts
distribution centre which will start operation in 2004. Together with
its local partners, the BMW Group is investing a total amount of more
than 21 million euros in the three projects. The BMW Group is thus
continuing its market initiative consistently and creating an important
structural framework for its envisaged growth in Asia. The company is
planning to double the sales volume in its Asian markets in the next
five years, from 78,500 automobiles in 2002 to around 150,000. The new
sales subsidiary, BMW Malaysia Sdn Bhd, will be based in Kuala Lumpur
and will commence business activities on 1 August 2003. The BMW Group
has a 51% holding, whilst Sime Darby holds 49% via the subsidiary
Tractors Malaysia. Sime Darby has been operating in Malaysia for the
BMW Group as a partner in the sales business and the operation of the
local assembly plant for BMW automobiles since 1987. The joint venture
will be responsible for, amongst other things, pricing and product
strategy, marketing, dealer development and after-sales. Sales to
customers will continue to be carried out by independent dealers. The
total investment in the joint venture amounts to euro 7.9 million.
Lueder Paysen, head of the BMW Group's sales region Asia, Pacific,
Africa and Eastern Europe, said today at a press conference in Kuala
Lumpur: "With the new sales subsidiary, we are able to further
intensify our presence in the market and fully exploit the high growth
potential in Malaysia. In Sime Darby, we have an ideal, tried and
tested partner who, with its sound knowledge of the market, will play
an important part in the success of the joint venture." In the
first six months of 2003, the BMW Group in Malaysia sold a total of
1,132 BMW and MINI brand automobiles (previous year 1,123 automobiles)
and thus stabilised sales at a high level. In June, an increase of
17.9% to 283 vehicles was achieved (previous year 240 automobiles).
With the joint venture in Malaysia, the BMW Group now has 28 sales
subsidiaries worldwide, including six in Asia (Japan, South Korea,
Thailand, the Philippines, Indonesia, Malaysia). In addition to the
sales subsidiaries, the BMW Group operates five assembly plants in Asia
altogether - in Vietnam, Thailand, the Philippines, Indonesia and
Malaysia. At the end of March 2003, the BMW Group also signed a
contract in Beijing relating to a production and sales joint venture in
China. Construction of the plant in Shenyang in Liaoning province is
running according to plan, and the first models of the BMW 3 Series
will come off the production lines in autumn 2003. New IT centre for
the Asia, Pacific and Oceania region In addition to the sales joint
venture, the BMW Group has set up a new IT centre in Kuala Lumpur.
Capital expenditure until 2004 will be around euro 5.5 million. The
centre is the regional hub for all the company's IT networks in the
Asia-Pacific-Oceania area and started operation in the middle of June
2003. The BMW Group is thus supplementing its global IT infrastructure
with a third pillar in Asia, in addition to the two existing IT centres
in Germany (for the Europe, Middle East and Africa regions) and the USA
(for North and South America). Relocation of parts distribution
centre from Singapore to Malaysia The comprehensive involvement of the
BMW Group in Malaysia will be supplemented by the second half of 2004
by the relocation of the parts distribution centre for the
Asia-Pacific-Oceania region, which is currently still based in
Singapore. Capital expenditure is over euro 8 million in total. The
centre will be based in Port of Tanjung Pelepas near Kuala Lumpur.
Singapore will continue to be the location for the BMW Group's central
sales office for controlling the importer markets in the Asia Pacific region.