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Statement Oliver Zipse, Chairman of the Board of Management of BMW AG, 103rd Annual General Meeting of BMW AG in Munich on 11th May 2023
Statement Oliver Zipse AGM 2023
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We move body, heart and mind.
The BMW Group – your company.
Today is one of the days of the year that I particularly look forward
to. At our Annual General Meeting, we stand before you, to answer your
Of course, you want to know: what are we accomplishing at Team BMW Group – and, most importantly: What are our plans?
You are invested in a company with ambitious goals. Thanks to our focus and determination, you can rely on us to realise our plans – in the short, medium and long term, year in, year out. That is what you expect from us – and we deliver!
On that note, let me wish you all a warm welcome from BMW Welt in Munich!
You are our owners. The BMW Group must remain an attractive investment for you – in good times, but, also, when the world is suddenly a different place, as it was last year. 2022 was a difficult year. It touched us on a human level – and we helped where we could. But it was also challenging for us as a company.
BMW has held its own in the marketplace for over 100 years: This requires the will and the ability to change. However, our mission always remains the same: to lead your company into a successful future! We have the ability to act independently and make decisions with a long-term perspective. This not only sets us apart from others; it is also a genuine privilege – because entrepreneurial freedom increases our resilience and, in uncertain times, even becomes a competitive advantage.
We have entrepreneur Herbert Quandt to thank for all of this. Both his children and the BMW Group are equally committed to his legacy. That is why the company and its employee representatives always work together in constructive ways to find the best solution.
We stand together and we respect each other – that is how the BMW Group operates as a global team, with more than 30 production sites on five continents, research and development centres in 17 countries and 41 locations for sales and financial services.
Together, our BMW team is now 150,000 strong, with people from almost all nationalities and cultures, representing different age groups and ways of thinking.
This diversity sets us apart.
Right next door is our main plant. We have people of over 70 nationalities working at that site alone. In March, I attended the employee meeting. It reminded me that our associates really know what they are doing. We are currently refurbishing our oldest plant, located right in the heart of the city, and transforming it into a cutting-edge location for e-mobility. An area the size of nine football pitches will be remodelled in the coming years – while maintaining production at full tilt. That doubles the burden on our team. It is like performing open heart surgery – but everyone is on board.
It was therefore also important to me personally to be able to announce the highest-possible profit-sharing bonus. Not just in Munich: Employees at all our German locations will receive this benefit for 2022 because we were successful together!
On the weekend of 8 to 9 July, we will be opening the doors of our Munich facilities: the plant, BMW Welt and BMW Museum, as we catch up on the anniversary events we weren’t able to hold under coronavirus restrictions. You’ll remember that our main plant had its centenary in 2022 and the BMW Group Headquarters also turned 50. Now, we are inviting everyone at our Munich location to join us with their family and friends. The Board of Management is also looking forward to this event.
Our home base is representative of our network. We all live the BMW culture, with its strong values of responsibility, appreciation, openness, transparency and trust.
That is why my first thank you today goes out to our global team. Personally, and on behalf of the Board of Management, I have to tell you that what you all accomplish every day is incredible!
Our values are also reflected in how we engage with our partners. Last year, we faced disruptions to key supply chains, like semiconductors. Once again, our sound supplier relationships proved they were up to the task. So, my second thank you is for our suppliers! We are all in the same boat: If the BMW Group is strong and successful, so, too, are its suppliers and vice versa.
Last year, I introduced you to our North Star – our source of identity and direction that also defines why we exist as a company. We move body, heart and mind. Being mobile and the joy we feel when doing so — that must also be rationally based. In other words, go hand in hand with reason and responsibility. That is why we have assigned the mind as a third component to our North Star.
This pledge is our promise to customers – and to society, which expects us to make an effective contribution, to have an impact. That is why we are confidently continuing on our path forward as a company.
I’d like to talk about five aspects regarding how we are doing this:
- Your company is becoming even more resilient in the face of complex challenges.
- Your company charts its own course.
Your company maintains a good balance between the
different regions of the world.
- Your company is becoming entirely digital.
- Your company is already taking the next leap in innovation.
Ladies and Gentlemen,
Every journey into the future starts with a status quo.
That is why I'd like to talk first about our starting position:
the financial year 2022 and our goals for 2023.
In the past year, we grew in three different ways: with e-mobility, in our financial results and through the complex challenges we faced. Looking back, 2022 could broadly be described as a year in task-force mode. Our environment was dominated by unexpected events and profound challenges – each with the potential to jeopardise our goals: supply challenges for semiconductors and wiring harnesses; bottlenecks in vehicle and parts logistics; pandemic-related closures in China; rising prices for commodities, materials and energy, as well as geopolitical tensions.
As so often in our history, we drew on our inner strength, learning from crises and emerging from them stronger than ever. We proved once again that we can handle complexity and are capable of pivoting quickly if the situation requires.
Your company remains on track for success: Around 2.4 million people bought a BMW Group vehicle in 2022. That is down slightly on the previous year, but still a solid performance. It also signals our determination to the competition: BMW continues to lead the global premium segment. BMW and MINI’s global market share is stable at 3.4 percent, which is also important.
Our Rolls-Royce and BMW Motorrad brands even posted all-time highs, along with BMW M GmbH. What do you think the top-selling M model was in 2022? It was the all-electric BMW i4 M50*. I believe that shows where we are heading. We delivered over 215,000 battery-electric vehicles, BEVs for short, to customers last year. That is more than twice the number for the previous year, despite the difficult supply situation.
We also delivered on another promise: We reduced the CO2 emissions of our EU new vehicle fleet by more than nine percent in the WLTP cycle compared to the previous year, so that CO2 is now at 105.0 grams per kilometre.
We are even 22.5 grams below the ambitious EU27+2 CO2 fleet target of 127,2 grams – a decrease of 17 percent. That’s a lot of numbers – but behind them stands a tremendous performance. This is only possible if all types of drive train contribute to climate goals. I’ll come back to that in just a moment.
Our vehicles are in demand, as reflected clearly in your company’s profitability.
Let me give you the most important key figures for 2022:
Group revenues reached 142.6 billion euros, with Group earnings before tax of 23.5 billion euros. This is a significant increase compared to 2021. Our joint venture BMW Brilliance Automotive was fully consolidated in our Group Financial Statements for the first time in 2022, resulting in a one-time effect of 7.7 billion euros. We also achieved strong pricing for both new and used vehicles.
The EBIT margin in the Automotive Segment was within our strategic target range of 8 to 10 percent. The figures for the first quarter of 2023 also underline the robust results of your company. Together, this underscores that your company remains profitable, even in a turbulent environment, as we continue to invest in our own future.
Today, we are therefore proposing to you as our shareholders a dividend of 8.50 euros per share of common stock and 8.52 euros per share of preferred stock – one of the highest dividends in the DAX-40. The payout ratio is within our strategic target range, at 30.6 percent. Our dividend policy remains reliable – and we are committed to that.
In 2023, macroeconomic conditions will continue to be difficult, with
high inflation and an uncertain overall geopolitical situation. Our
assessment of external developments is realistic, but deep down, we
are always optimistic. Our order books are still strong, for both
all-electric and conventional vehicles –
which is a unique quality. So, what are our plans for 2023?
Our deliveries are forecast to increase slightly, with a significantly higher percentage of all-electric vehicles. We expect the EBIT margin in the Automotive Segment to be between 8 and 10 percent.
Group pre-tax earnings will decrease significantly, largely due to the one-time positive effect from the revaluation of our previously held equity interests in BBA in 2022.
After the first quarter, we are on track to meet our goals. In BEV deliveries, we reported strong growth in all four major regions of the world. The BMW brand alone more than doubled its BEV sales and this trend continued in the month of April.
The development of the BMW shares is also impressive: An increase of around 30 percent since the beginning of the year.
That brings me to my second point:
charting our own course.
Our product offering is younger, more diverse and more attractive than ever before. This applies to all our brands, all segments and all types of drivetrain. It reflects the diversity of our customers’ lives and is the most effective way we can contribute to climate goals – already today!
The new BMW 7 Series I shared with you last year is now available, along with the new BMW X1. Both are perfect examples of how we are meeting customer needs with a broad range of technologies; both were launched on time for their announced dates; and both are winning their comparative tests. We are aiming for profitable growth with all drive technologies and in all segments. In this way, we can gain market share and leverage earnings potential. This applies to the upper premium and luxury segments, with new BMW models like the 7 Series, the XM* and model update of the X7, not to mention the Rolls-Royce model family.
Vehicles from your company were also very present on the streets of London at the coronation of Charles III and his queen consort, Camilla. Our fleet included some beautiful classic Rolls-Royce cars from our luxury brand based in the UK. BMW models such as the new 7 Series and the X5 were also part of the ceremony, as well as numerous BMW motorcycles. Not only members of the royal family were driven with our all-electric i7*, but also the state guests who arrived via Heathrow Airport.
With our strong line-up in the upper segments, we are targeting
growth in the
mid-double-digit percentage range this year and aiming even higher with our BEVs, where our sights are set on high double-digit growth.
Over the full year, BEVs should account for 15 percent of our global deliveries. That is what I call ambitious because this will be the highest absolute increase we have targeted to date. Ramping up e-mobility is a priority for us.
We already have over 600,00 BEVs on the roads – and this dynamic momentum is set to continue: By 2024, at least one in five of the BMW Group’s new vehicles should be a BEV; by 2025, it will be one in four and, by 2026, one in three. More than half the vehicles we sell worldwide will be fully electric before 2030.
In Europe, for example, we will be at well over 50 percent by then. In principle, if individual markets or regions already demand 100 percent e-mobility at a certain point in time – we will be ready and able to deliver. By the end of this year, your company will have at least one BEV on the roads in all its main model ranges.
The Rolls-Royce Spectre is being released at exactly the right time. We have never had so many pre-orders for a new Rolls-Royce model. MINI embodies an attitude to life. MINI fans can look forward to three new BEV models over the next year, all of which represent the NEW MINI Family.
BMW Motorrad is already relying on e-drives for urban settings today. Its CE 02 will mainly appeal to young people living in the city. I’ve brought the Concept along with me today.
But let's move on to our core BMW brand.
2023 will be all about the new 5 Series and the new X2, including their BEV variants: the i5 and the iX2. The media is currently putting the 5 Series through its paces in the pre-drive phase. And it is receiving great coverage. Bottomline: the BMW 5 Series is THE top business sedan across all drive trains – conventional and fully-electric.
The market for e-mobility is attractive and therefore highly competitive. In China, in particular, new competitors are breaking into the market. I saw this for myself at the Auto Shanghai in April. Some manufacturers are currently lowering prices – in some cases, substantially – to gain market share.
We can confidently say that your company has a strong position in China. We will already offer 11 BEV models in the Chinese market across our four BMW Group brands from late this year. We are also focusing our BEV footprint exclusively in the premium and luxury segments. China is decisively driving e-mobility forward, but it is true that regions and individual markets will continue to develop at different rates for the foreseeable future.
In April, I also visited Japan, where the situation is very different. Demand for pure battery-electric vehicles is developing steadily, but slowly, at a relatively low level. Customers there prefer hybrids and cars with efficient combustion engines.
There is also considerable interest in hydrogen and our BMW iX5 Hydrogen* has been welcomed with open arms. It certainly has a lot to offer, with an electric range of about 500 kilometres in the WLTP cycle and the ability to refuel in three to four minutes. We are currently sending a pilot fleet to selected markets, including Korea, Japan, China, the US and Europe, where we are testing this technology in everyday driving. By the way, fuel cells require significantly fewer critical raw materials than battery cells. All of these factors make hydrogen attractive and relevant for many industries. Trucks and passenger cars alike would benefit from a shared infrastructure.
Your company is once again leading the way: At Plant Leipzig, we already use over 130 hydrogen-powered vehicles for internal logistics and operate five hydrogen filling stations.
Our world is diverse and highly individual at the same time – why should our mobility be any different? Have you ever tried standing on one foot for an extended period of time – never mind trying to walk like that? We believe the future of mobility needs at least one more leg to stand on, in addition to battery-electric drivetrains.
It is already easy to see that anyone who relies solely on e-mobility risks new dependencies, especially with regard to raw materials for batteries. It’s like driving down a one-way street – if something holds up traffic, everything grinds to a standstill.
With our technology-open approach, we know we are swimming against the tide – but the picture is slowly evolving. Both the media and analysts recognise the positive climate effects we are achieving. At the same time, this also puts us in the best position to meet real customer requirements and take account of regional conditions. Diversity means resilience. And resilience means success – for business and for climate protection.
Let’s continue with the third point of our path to the future.
Your company has a presence in all regions of the world.
We at BMW always talk about four major regions: Europe, with our domestic market, Germany; the Americas, with our “second home”, the US; and Asia, with our largest single market, China. The remaining markets are also our important “fourth pillar”. There is a lot of potential here – not only for growth, but also for rapid response and higher resilience. With a good balance of sales across the main regions, we are able to compensate for regional fluctuations in the market. Right now, we are offsetting the slightly weaker market in China with improved performance in the US.
Just as with sales, we also produce in a balanced way in regions of the world. The BMW iFactory can already be experienced at all our plants – for example, in China, where, in April of last year, we expanded the Dadong site to localise the BMW X5 as a long-wheelbase version for China. In late June, we opened another plant at the Tiexi site that is completely geared towards e-mobility. This was planned entirely in a virtual environment – which makes us faster and also saves costs.
Next week, we will celebrate “20 years of BMW Brilliance” in China and will be announcing plans to expand the activities of our joint venture in Shenyang.
In Europe, construction of our new plant in Debrecen, Hungary is progressing according to schedule. This facility was also planned digitally, allowing us already today to simulate operating processes and procedures virtually, and optimise them ahead of time. As promised, the plant will produce in a climate-friendly way without fossil fuels.
We are also applying our local for local principle to the ramp-up of e-mobility. All our plants in China, Europe and the Americas are already capable of building electrified vehicles. At our biggest plant in Spartanburg, South Carolina, all-electric vehicles will soon be rolling off the assembly line: six BEV models by 2030, to be exact, with an investment of over 1.7 billion US dollars. We will be manufacturing the necessary high-voltage batteries for this at a completely new plant in nearby Woodruff.
This is just one example of how we are selectively expanding our local production of high-voltage batteries. This currently applies to our BEVs at sites in Germany and China. We are also creating additional capacity for the sixth generation of battery technology in the US, in Debrecen and in San Luis Potosí, Mexico – as well as on our doorstep in Lower Bavaria.
We also need a location for high-voltage batteries that is close to our Bavarian vehicle plants. For this, we are planning a high-tech production facility, which meets to the highest environmental standards.
All these decisions show how, with our local for local approach, we are strategically securing our BEV ramp-up in the main regions of the world and, at the same time, significantly increasing our resilience to unforeseen events. This is very important in a world in which the major economic areas are drifting further apart.
Politics is increasingly impacting our business. In the US, the Inflation Reduction Act is being used by policymakers to promote climate protection and strengthen the domestic economy. In Europe, on the other hand, the European Commission is massively tightening the planned Euro 7 standard. This means even more regulation, but without any improvement in air quality. I’m not going to beat about the bush: How it is planned right now is simply not going to work!
The planned date of July 2025 is entirely unfeasible, with totally unrealistic driving situations becoming the rule. These so-called testing environmental conditions – which could also be described as special cases – require carmakers to deal with any and all exceptional situation.
I think everyone can answer this for themselves: How often, for example, do you drive up a mountain pass, at full throttle, in minus seven degrees, in a car that is fully loaded and pulling a trailer? We are fighting for a sensible Euro 7 solution, which also effectively increases air quality in cities. The Works Council and IG Metall trade union are firmly on our side.
What matters most to us is:
• A realistic start date in mid-2027.
• Effective limits for testing environmental conditions.
• No focus on special and extreme cases.
We proposed a valid solution in the European Automobile Manufacturers' Association, ACEA.
On to the fourth part:
Your company is becoming entirely digital.
Ladies and Gentlemen,
The best way to understand digitalisation is by experiencing it.
That gives you a few impressions of the world’s biggest tech show. 2023 got off to a brilliant start for us: We unveiled the BMW i Vision Dee for the first time at the CES in Las Vegas, astonishing the world and proving that it isn’t just start-ups that can look far into the future and realise new ideas. This is what makes your company stand out from many of its competitors. And it’s not every day I get to stand on stage alongside Arnold Schwarzenegger. Feedback in the media and on social media, in particular, has confirmed that we really hit the mark with our digital vision.
For example, with Dee’s dazzling array of colours. Thanks to E-Ink technology, Dee can easily change colour or create a mix of any of 32 colours.
In the video, you also saw the Head-up Display across the full windscreen, which lets you seamlessly merge real driving pleasure with virtual worlds. Our BMW Panoramic Vision is no science fiction: A standard-production version of this technology will be available in about two years.
It is also clear that a vehicle like Dee can only be built at a digital company. Digital mobility can already be experienced in our vehicles today. Let me give you three examples:
1. The “Highway Assistant” in the new BMW 5 Series continuously takes over distance control and steering tasks for an extended period. For the first time, the vehicle can also change lanes using gaze activation. It notices when you look to the side, registers what you want to do and then switches lanes. This is a world first. No one else offers a package like this.
2. With the “Digital Key Plus”, you can now unlock and start your BMW with an Apple or Android smartphone – with ultra-wideband technology, you don’t even need to take your phone out of your pocket.
3. In the new 7 Series, the Theatre Screen in the rear compartment gives you an exclusive seat in the stadium for Bundesliga games. We are the first automotive manufacturer to sign a contract with the football league in Germany to make live football matches available.
Digital vehicles also use artificial intelligence – but it’s still no replacement for human creativity. We are currently embarking on the company’s biggest-ever training initiative. This digital boost will create the knowledge and tools we need to identify and implement digital potential in every area of responsibility. All managers, non-production functions and, of course, Board of Management members, will benefit from this digital boost because, for all of us, rapid digitalisation means lifelong learning. Digital is becoming a new basic skill, like reading and writing.
Lastly, digitalisation will open up new ways of approaching customers. Our future sales structure also includes direct sales through agents. We already successfully tested this model in South Africa and have been using it in China with the MINI brand since March, with the European sales region set to follow next year. We will transition the BMW brand in Europe from 2026 onwards. It is important to note that we are implementing our new sales model in collaboration with our retailers and with the broad support of our partners.
On to the fifth part:
Your company is already taking the next leap in innovation.
Transformation is deeply rooted within our experience, as illustrated by the three major tipping points in BMW history:
- The shift from engine manufacturer to putting the first BMW motorcycle on the roads, exactly a hundred years ago,
- The development of the style-defining cars of the 1930s, and
- The rediscovery of the sporty mid-range car in the early 60s.
Each of these milestones moved your company forwards and continues to drive the BMW Group to this day.
In 2025, we will be taking another huge leap with the introduction of the NEUE KLASSE. This tipping point will herald another typical BMW transition, with nothing less than a completely new product offering, a new mindset and, ultimately, a new company. The countdown is running!
This year and next, our preparations for the NEUE KLASSE will be intense.
In 2025, production will initially get underway at Plant Debrecen, followed, in 2026, by the main plant in Munich and, in 2027, by Plant San Luis Potosí. We aim to release at least six models onto the market in the first 24 months after the start of production and will specifically be targeting high-volume segments from the beginning – with a Sports Activity Vehicle and a sedan in the 3 Series segment.
The NEUE KLASSE will be electric, digital and circular – precisely the right buzzwords for future mobility. But none of this will happen overnight. Many smart intermediate steps will be needed, like our Vision Vehicles: the BMW i Vision Circular, presented in 2021, for the circular economy and, this year, BMW i Vision Dee for digitalisation.
In September, right here in Munich, it’ll be time for the IAA MOBILITY again, where we will be combining all these topics – digital, circular and electric – to create a coherent overall concept. Come pay us a visit!
You support our long-term strategy; you give us strength. On behalf of the Board of Management and the BMW Group's global team: thank you.
I started out today talking about our home base and I would like to close by coming back to that. You are all familiar with the discussion in the media and the sobering fact that women in Germany still earn up to 18 percent less than men. That is not the case at BMW AG: The men and women who work for us earn the same. We are the first German company to be recognised with the gold standard for equal pay.
There is no question in my mind that fair salaries are part of our culture.
We expect a great deal from our team: We expect them to push forward with the complex transformation of mobility, to be flexible, to take on new tasks. For the first time last year, we invested more than 400 million euros in vocational training and continuing education. On the subject of vocational training: In 1923 – almost 100 years ago to the day – the very first apprentice signed their contract with BMW.
Already at BMW back then, the future was made by people. Some things don't change – even in our fast-paced times. The future is shaped more than ever by inherent systemic complexities. Simple, linear chains of impact and target systems no longer exist – which also means there are no easy answers.
Our decisions in all areas must be rooted more in facts, scientific knowledge and a healthy pragmatism.
This creates a positive spirit – inspiring fresh confidence in our ability to find solutions through innovation and technological progress. It is our task at the BMW Group to ensure the profitable growth of your company in the long term.
That is why we are consistently pursuing our own BMW path towards the future.
Thank you for standing by us! It is the right decision.
We'll make sure of that.
CO2 EMISSIONS & CONSUMPTION.
BMW i4 M50: Power consumption in kWh/100km WLTP (combined): 22.5-18.0; CO2-emissions in g/km: 0.
BMW XM: Fuel consumption weighted, combined in l/100 km: - (NEDC)/1.6-1.4 (WLTP); CO2 emissions weighted, combined in g/km: - (NEDC)/36-32 (WLTP); power consumption weighted, combined in kWh/100 km: - (NEDC)/301-28.6 (WLTP); electric range (WLTP) in km: 82-90
BMW i7 xDrive60: Power consumption in kWh/100km WLTP (combined): 19.6 – 18.4; CO2-emissions in g/km (combined): 0.
BMW iX5 Hydrogen: Power consumption in kg H2/100 km WLTP: 1.19; CO2-emissions in g/km (combined): 0.
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Statement Oliver Zipse, Chairman of the Board of Management of BMW AG, 103rd Annual General Meeting of BMW AG in Munich on 11th May 2023 PDF, EN, 2.37 MB