SPEECH: DR. HELMUT PANKE - GENEVA 2006 PRESS EVENING

Ladies and Gentlemen -
I would also like to welcome you at the BMW Group Press Evening here at the
waterworks.
As you can see, tonight's setting is dedicated to motor sports. We have brought
an entire range of vehicles, which are the showpieces of the BMW Group's
activity in this field. My colleague Burkhard Goeschel will tell you a bit more
about these cars later.
We have chosen this setting set for tonight's get-together as it symbolizes the
essentials of the BMW Group's success: competition, the strong will to deliver
top performance and the aspiration to succeed - "winning the race" in motor
sports terms.
In brief: The BMW Group is a top performer - as the outstanding business year
2005 has just shown again.
You all know that 2005 was not an easy year for the global automotive industry.
Manufacturers in general suffered from the effects of high raw material prices.
And those companies in particular which - just like the BMW Group - are very
successful in the U.S. also had to deal with the year's unfavorable euro-dollar
exchange rate.
Please do not get me wrong: I am not complaining. 2005 was again a very
successful year for the BMW Group. All our three brands - BMW, MINI and
Rolls-Royce - posted new records in retail volume last year. We sold a total of
over 1.3 million vehicles worldwide. This is an increase of almost 10 percent
compared to the business year 2004.
Currently, the BMW brand is the world's most successful premium brand. For the
first time, the company delivered more vehicles to customers than any other
premium brand. Most BMW model series are market leader in their respective
segments, for example the BMW 3 Series, the 5 Series and the 7 Series.
And more than that: In 2005, the BMW brand was also the world's fastest-growing
premium manufacturer. Not only is BMW the number one; it is even extending its
lead. Percentages do not always reflect that, but:
• If a company that sells one million vehicles a year grows by 10 per cent, it
has won an additional 100,000 customers.
• If a competitor that sells only 700,000 vehicles a year also grows by 10 per
cent, naturally this is only an increase of 70,000 customers.
• So in this case, the first company would actually have extended its lead by
30,000 customers.
But no one even matched BMW's growth rate last year. In 2005, the BMW brand
grew more than any other premium brand with a comparable product portfolio. And
that not only in absolute terms, but also in terms of percentage. So below the
line, our lead has increased substantially. Of course, some of our competitors
are trying to give the impression that they are about to catch up. But the
facts speak for themselves:
In 2005, no other premium brand managed to grow as much as the BMW brand,
• no premium brand in Asia,
• no premium brand in the U.S.,
• and no premium brand in Europe, let alone in Germany.
And this statement holds true even if you take a broader view: Over the last
five years, the lead of the BMW brand has increased considerably - in some
cases it has even doubled.
Ladies and Gentlemen -
Whether a company delivers top performance or not is obviously not only a
question of retail volume. True enough, those figures are highly significant.
But they are not sufficient if you want to evaluate a company's success.
The company's bottom line is equally important in this context. And again, we
are able to say: The BMW Group is a profitable top performer. Just compare our
key data like earnings or profit margin to those of our competitors and you
will see: The BMW Group is not only the number one premium manufacturer in the
automotive industry in terms of retail volume, but is ahead of almost all
direct competitors in terms of profitability as well.
Why is that so?
Just think about what the answer to this question would be in motor sports. It
would pretty much always be the same. You can only win if all pieces fit
together - if several individual top performances coincide:
• This includes the driver,
• the engine,
• the chassis,
• aerodynamics,
• the mechanics,
• and a lot of other crucial factors.
Success will not come if you rely on one single top performance in one
particular area - many top performances have to be combined.
And basically the same applies for companies.
The reason why the BMW Group is extending its lead over competitors within the
industry is that we have managed to create an ideal and harmonious combination
of a high-performance team, a high-performance organization and
high-performance products.
From the BMW Group's perspective I can say: Trying to improve continuously as a
high-performance company - as we have been doing for many years now - has
definitely paid off.
We have clear goals:
• We want to provide our customers with emotional, individual and desirable
premium high-performance products.
• To this end, we strive for maximum efficiency everywhere in our company. Our
structures, our organization, our processes - everything is geared towards
ensuring top performance. If we see potential for improvement, we seize the
opportunity - without any ifs, ands, or buts.
• And last but not least: We intend to be the most attractive employer to the
best staff. One thing is a given: A high-performance company has to be
successful in recruiting and retaining the smartest employees.
Top performance is the main line of thought running through our company and the
key driver of our success. And we are continuing along this path.
One of the BMW Group's guiding principles is balancing the give and take. That
is to say: High-performers deserve high rewards. This means: We definitely have
high expectations of all our associates. But in return, we are more than
willing to honor their achievements. Let me give you one example: Several
decades ago, we established a profit bonus system that is directly linked to
the success of the company. This way, we raise motivation as well as the
associates' willingness to deliver the top performance we are known for.
If we speak about the BMW Group as a high-performance team, there is one thing
we must not forget: Our strength does not result from the company management
requesting top performance, but from our associates wanting to be a team of top
performers. No matter where our associates work and what they do - they are
proud to be part of our winning team.
All BMW Group associates want the company to succeed. In order to reach this
goal, they are willing to go to their limits.
This is how we have mastered our product initiative of the past years. And this
is how we intend to expand further in the years to come. But not at any cost.
We have three extraordinarily strong brands, each with its own, clear profile.
Our brand and product portfolio does not overlap at any point. But the crucial
point is: Each of our products is a 100 per cent perfect match for the BMW
Group and for our brands.
Let me be a bit provocative here: The success of our product initiative is not
only the result of the new products we have launched over the last few years,
but also of those we did not produce.
We definitely stand our ground when it comes to offering nothing but
high-performance products to our customers. This means, though, that in case of
doubt we must not compromise.
We would rather miss out on the opportunity to expand into a new segment
instead of offering a compromise which was neither up to our standards nor to
customers' expectations.
I guess we might be able to make money with a product that does not suit our
company and our brands. But in the end, the long-term damage would outweigh any
benefit.
Ladies and Gentlemen -
For many years, the BMW Group was a runner-up to the industry leader. Year by
year - or lap by lap - we caught up a bit more. And last year, we finally
managed to get ahead.
Now we are in the lead and this is where we want to stay. Of course we realize
that our competitors are not slowing down, but are trying to catch up again.
However: We are aware of this situation. We are not going to make the mistake
of being content with our current lead. We are continuing to go to our limits.
Tomorrow, when you visit the stands of our three brands at the Geneva
International Motor Show, this is exactly what you will see: We are working at
full speed. Our product initiative is in full swing. Our products have an
emotional appeal, and they keep fascinating our customers. In other words: We
continue to deliver top performance - and we will stay in the lead.
Tonight our motor sports activities are taking center stage. And I am delighted
to see so many of our motor sports protagonists here tonight. As a matter of
course, success in motor sports always depends on the interaction of excellent
technology and an excellent team of people getting the best out of this
technology.
You see, this is also about the interaction of high-performance products, a
high-performance organization and a high-performance team.
Thank you for your attention. I now give the floor to my colleague Burkhard
Goeschel. He is going to present some highlights from recent motor sports
history. But first, we have a short film for you which demonstrates the
importance of motor sports for our company: And action!