Sharp increase in second quarter earnings

Sharp increase in second quarter earnings *** Profit before tax up by 32.9% to euro 1.232 billion Record sales volume and revenues figures *** Return on sales rises to 9.3% *** Earnings and sales volume outlook for full year confirmed Munich. After its successful start into the year, the BMW Group continued to perform well in the second quarter 2006 thanks to rising sales volume and a more favourable model sales mix. "We have again increased earnings sharply and achieved new record figures for revenues and sales volume", stated Helmut Panke, the Chairman of the Board of Management of BMW AG, on Wednesday in Munich. On this basis, the BMW Group is therefore well on course to achieving its targets for the full year 2006 and hence, as forecast, the best year in the company's history: "The BMW Group is aiming to achieve a profit before tax of euro four billion and a new record sales volume", reaffirmed Panke. Group revenues for the second quarter climbed by 8.5% to euro 13,193 million (second quarter 2005: euro 12,159 million). The profit before tax rose by 32.9% to euro 1,232 million (second quarter 2005: euro 927 million). As a result of this jump in earnings, the pre-tax return on sales increased on a comparable quarter basis from 7.6% to 9.3%, and thus remains well above the average for the automobile industry. The net profit for the second quarter improved by 17.5% to euro 787 million (second quarter 2005: euro 670 million) and earnings per share of common stock increased to euro 1.20 (second quarter 2005: euro 0.99). Six-month earnings rise to new record The BMW Group's pre-tax profit improved by 44.5% to reach a new high level of euro 2,528 million (first half-year 2005: euro 1,749 million). This includes - as already reported at the beginning of May - an one-off gain of euro 375 million recognised in the first quarter arising from the almost complete settlement of the exchangeable bond relating to the BMW AG investment in the British aero engine manufacturer, Rolls-Royce plc. The profit after tax was euro 1,735 million (first half-year 2005: euro 1,195 million), up by 45.2%. Revenues rose by 10.2% to euro 24,811 million (first half-year 2005: euro 22,516 million). Even excluding the exceptional gain on the exchangeable bond, the return on sales improved to 8.6% (first half-year 2005: 8.0 %). Adverse currency effects and high raw material prices continued to have a negative impact on earnings during the reporting period. This currency effect - which arises mainly in the first half of 2006 - is attributable to the fact that currency hedge rates are less favourable than in the previous year. The BMW Group will have to face further adverse external factors during the remainder of the year, the impact of which will diminish towards the end of the year. These external adverse factors - the overall effect of which will not reach the high level of 2005 - are being countered by continuous measures to increase efficiency and productivity. The targeted sales volume record and improvements in the sales mix are also expected to make further positive contributions to earnings. For these reasons, even excluding the exceptional gain on the exchangeable bond recognised in 2006, the profit before tax should still exceed the amount reported for 2005. The BMW Group aims to continue its profitable growth course over the coming years and, by comparison to the sector as a whole, continue to generate above-average returns. Number of jobs virtually unchanged The BMW Group had a worldwide workforce of 106,150 employees at the end of the second quarter 2006, 0.2% more than one year earlier (105,888 employees). Further additions to model range The BMW Group is again introducing numerous new models during the current year. With the launch of the new Z4 Coupé and the Z4 M Coupé in June 2006, the BMW Group has added two particularly dynamic and sporty cars to its product range. The successor to the BMW 3 Series Coupé and the updated BMW X3 will be introduced into the markets in September. The MINI brand product range will be expanded within the next three years by a new model with a more spacious interior and greater functionality. A new Rolls-Royce Convertible will also expand the product range in the super-luxury segment. Position as the world's leading premium manufacturer asserted The BMW Group sold more cars both on a quarterly and half-year basis than ever before, thus asserting its position as the world's leading premium manufacturer. The sales volume of BMW, MINI and Rolls-Royce brand cars between April and June rose by 3.2% to 365,547 units (second quarter 2005: 354,324 units). For the six-month period, the sales volume climbed by 8.0% to 698,470 units (first half-year 2005: 646,531 units). The number of BMW brand cars sold in the period from January to June went up by 11.0% to 597,120 units (first half-year 2005: 538,132 units). This growth was driven in particular by the BMW 3 Series Sedan, which came onto the market in March 2005 and which registered a 36.9% jump in sales volume to 175,141 units. In the case of the new BMW 3 Touring, which has been available since September 2005, the sales volume recorded in the first half of 2006 was nearly double the figure for the corresponding period last year, rising by 95.6% to 53,728 units. In total, 254,338 BMW 3 Series cars were handed over to customers during the six-month period (+30.0%). This model series therefore accounted for 43% of the total volume of BMW brand cars sold. Sales of the BMW 5 Series were also up. For the six-month period, the sales volume increased by 4.8% to 118,570 units. The BMW 7 Series Sedan, the BMW brand flagship, also registered strong growth, with the sales volume for the six-month period up by 26.4% to 25,434 units. Almost 235,000 BMW 7 Series Sedans have now been sold in the four and a half years since market introduction. Measures to expand the production capacity of the Oxford plant to approximately 240,000 units per year have impacted on the sales volume of the MINI brand over the six-month period. As a result of the reduced production volume during this period, worldwide MINI sales, at 101,063 units, were down by 6.5% compared to one year earlier (first half-year 2005: 108,114 units). The sales volume of the Rolls-Royce brand reached the previous year's level, with 287 Phantoms handed over to customers during the six-month period (first half-year 2005: 285 units /+0.7%). Automobiles segment records higher return on sales The profit before tax of the Automobile segment for the second quarter was again adversely affected by the currency factors and higher raw material prices referred to above. At the same time, however, it benefited from a rise in sales volume and favourable changes in the product mix and retail prices. Segment revenues between April and June increased by 8.7% to euro 12,943 million (second quarter 2005: euro 11,911 million) - the highest figure to date for a single quarter. The segment profit before tax improved by 15.9% to euro 947 million (second quarter 2005: euro 817 million). The segment return on sales rose to 7.3% (second quarter: 6.9%). Motorcycle segment reports higher earnings The reduced sales volume recorded by the Motorcycle segment at the beginning of the year due to unfavourable weather conditions was almost entirely offset during the second quarter. The number of motorcycles delivered between April and June rose by 3.0% to 37,052 units (second quarter 2005: 35,983 units); by the end of the six-month period, the shortfall had been reduced to 2.1%. Motorcycle segment revenues for the second quarter were down slightly (-0.9%) to euro 419 million (second quarter 2005: euro 423 million), while the profit before tax rose by 5.7% to euro 56 million (second quarter 2005: euro 53 million) on the back of the successful product initiative. Financial services business remains on growth course The Financial Services segment continued to perform well in the second quarter 2006. The profit before tax rose by 11.8% to euro 180 million (second quarter 2005: euro 161 million). The business volume of the segment, in balance sheet terms, rose by 12.5% to reach euro 41,420 million at 30 June 2006. The number of lease and financing contracts in place with dealers and retail customers increased by 11.1% to 2,179,933 contracts at 30 June 2006. The proportion of new cars of the BMW Group leased or financed by the Financial Services segment during the first half of the year was 42.1%; this was 0.9 percentage points above the proportion recorded for the corresponding period in 2005. * * * The full Interim Report to 30 June 2006 is available for download at www.bmwgroup.com/ir . The BMW Group - an Overview 2nd quarter 2006 2nd quarter 2005 Change in % Vehicle production Automobiles units 355,072 343,649 3.3 Motorcycles units 31,531 31,960 -1.3 Deliveries to customers Automobiles units 365,547 354,324 3.2 Thereof: BMW units 313,823 298,745 5.0 MINI units 51,544 55,420 -7.0 Rolls-Royce units 180 159 13.2 Motorcycles units 37,052 35,983 3.0 Workforce at end of quarter 106,150 105,888 0.2 Cash flow euro million 1,683 1,529 10.1 Operating cash flow euro million 2,522 2,605 -3.2 Revenues euro million 13,193 12,159 8.5 Thereof: Automobiles euro million 12,943 11,911 8.7 Motorcycles euro million 419 423 -0.9 Financial Services euro million 2,869 2,383 20.4 Reconciliations euro million -3,038 -2,558 - Profit before tax1 euro million 1,232 927 32.9 Thereof: Automobiles euro million 947 817 15.9 Motorcycles euro million 56 53 5.7 Financial Services euro million 180 161 11.8 Reconciliations euro million 49 -104 - Income taxes euro million -445 -257 73.2 Net profit1 euro million 787 670 17.5 Earnings per share1, 3 euro 1.20/1.21 0.99 / 1.00 21.2/21.0 January to June 2006 January to June 2005 Change in % Vehicle production Automobiles units 699,806 645,402 8.4 Motorcycles units 61,071 57,940 5.4 Deliveries to customers Automobiles units 698,470 646,531 8.0 Thereof: BMW units 597,120 538,132 11.0 MINI units 101,063 108,114 -6.5 Rolls-Royce units 287 285 0.7 Motorcycles units 56,103 57,287 -2.1 Workforce at end of quarter 106,150 105,888 0.2 Cash flow1 euro million 3,314 2,829 17.1 Operating cash flow2 euro million 3,743 3,721 0.6 Revenues euro million 24,811 22,516 10.2 Thereof: Automobiles euro million 24,174 21,865 10.6 Motorcycles euro million 732 741 -1.2 Financial Services euro million 5,607 4,518 24.1 Reconciliations euro million -5,702 -4,608 - Profit before tax1, 3 Mio. Euro 2,528 1,749 44.5 Thereof: Automobiles euro million 1,708 1,527 11.9 Motorcycles euro million 85 84 1.2 Financial Services euro million 353 311 13.5 Reconciliations euro million 382 -173 - Income taxes euro million -793 -554 43.1 Net profit 1 euro million 1,735 1,195 45.2 Earnings per share euro 2.64/2.65 1.77 / 1.78 49.2/48.9 For questions please contact: Press and Public Relations Mathias Schmidt, Finance Communications Telephone: (+ 49 89) 382-24118, Fax: (+ 49 89) 382-24418 Marc Hassinger, Business and Finance Communications Telephone: (+49 89) 382-23362, Fax: (+49 89) 382-24418 Internet: www.press.bmwgroup.com E-mail: presse@bmw.de

Munich. After its successful start into the year, the BMW Group continued to
perform well in the second quarter 2006 thanks to rising sales volume and a
more favourable model sales mix. "We have again increased earnings sharply and
achieved new record figures for revenues and sales volume", stated Helmut
Panke, the Chairman of the Board of Management of BMW AG, on Wednesday in
Munich. On this basis, the BMW Group is therefore well on course to achieving
its targets for the full year 2006 and hence, as forecast, the best year in the
company's history: "The BMW Group is aiming to achieve a profit before tax of
euro four billion and a new record sales volume", reaffirmed Panke.