SPEECH: DR. HELMUT PANKE, CHAIRMAN OF THE BOARD, BMW AG - PRESS TALK "BMW LENBACHPLATZ"

Press Talk "BMW Lenbachplatz", Munich, July 12, 2006

Ladies and Gentlemen -

Welcome to this evening at "BMW Lenbachplatz".

Last Friday, we published our current retail figures for the first half of the
year 2006. You will receive detailed information on group earnings in our
telephone conference on August 02.

Of course I realize that you would like us to share some information on our
half-yearly figures today - but you all know the rules.

And as you are already familiar with our current retail figures for the first
six months of the year, I am not going to talk about those either. Just a few
remarks to complement the data:

• With over 698,000 vehicles of the BMW, MINI and Rolls-Royce brands
delivered to customers by mid-year, we are clearly on the way to achieve
our goals for the current business year.
• Given these volumes, we expect to reach - as previously announced - a
new retail record in 2006.
• The BMW Group remains on track for success. Our retail figures
demonstrate that we have stood our ground as the number one premium
manufacturer over the first six months of the year. And we intend to
continue along this path.
• A brief word about earnings for the overall business year 2006: We are
confirming our pre-tax profit target of € 4 billion!

Considering all these positive facts, you might wonder how the BMW Group
manages to remain so much more successful than many other companies in the
automotive industry. In this context, we could discuss several different
aspects. But in light of recent events, I would like to focus on the BMW
Group's independence today.

You are all aware of the speculations about a possible alliance between GM,
Nissan and Renault. I can tell you right away: I am not going to comment on
this particular case. It is not our style to comment on other companies'
business. Instead, I would like to stress once more that I see the BMW Group's
independence as one of our company's critical success factors.

Over the course of the last two weeks, some members of the press have commented
on possible alliances in the automotive industry. A remark that caught my
attention was published in Frankfurter Allgemeine Sonntagszeitung on July 02.
The author said, quote: "The world's most profitable automotive manufacturers
are those that do not act within big conglomerates. Toyota and Honda, BMW and
Porsche have expanded and become successful as independent companies." End of
quote.

I completely agree with this statement. And I am going to tell you why.

Each company has its inherent strengths which make it unique. It has its
particular products which are characterized by a specific brand profile. It has
its specific processes and know-how as well as employees shaping a company's
one-of-a-kind profile. Even if two companies show certain similarities, they
are never really alike.

A company can only be successful if it completely focuses on its inherent
strengths. In this context, independence is not a matter of vanity. We use our
independence to do what we can do best. This is the BMW Group's strength. We do
not have to show consideration for the interests of others. We can completely
concentrate on ourselves.

Our company is often called headstrong on certain issues. To be honest: That's
absolutely true! And it is definitely one of our strong points:

• If we are convinced that a certain product decision is right, we will act
accordingly.
• If we consider certain technical innovations important, we will incorporate
them into our products.
• And if we arrive at the conclusion that the future success of our company
requires a subsidiary in a certain market, we will establish one.

The main point is: We decide on the way to go. We do not have to reach
agreement with others.

And there is another important point: Whenever we see the necessity to
cooperate with a partner on a particular project - we are free to choose one.

We are free to decide from case to case. We are not tied down by any obligation
to a certain partner, but can strategically decide for the partner that seems
to be the most suitable one in the particular situation:

• For the production of our BMW X3, we have a cooperation with Magna
Steyr Automotive Engineering in Graz, Austria.
• In engine production, we work together with PSA Peugeot Citroën to
develop engines for the MINI brand.
• And when it comes to hybrid technology, we have joined forces with
DaimlerChrysler and General Motors to design the basic technology for the
drivetrain of future hybrid vehicles. We will then develop these basic
components further in a way that will provide our customers with a
stand-alone BMW solution.

Ladies and Gentlemen -

Not only companies in our industry or in industrial production benefit from
being independent and having the freedom to take their own decisions.
Basically, this is a great advantage in any field.

Let's take politics as an example: Our political parties always have the
clearest profile during election campaigns. But as soon as they form
coalitions, their options diminish and they have to compromise.

Or look at your own industry: What is the strength of major daily newspapers
such as FAZ and Süddeutsche Zeitung? Or think about Focus and SPIEGEL.

The strength and success of these publications arises from their independence.
They are free to implement their philosophy however they please.

Hypothetically speaking: Imagine an alliance of Süddeutsche Zeitung and FAZ.
What would be the result? Would these newspapers remain the same? Would they
keep their clear profile? True enough - a cooperation would make them larger,
they would have a higher market share and print run. But do you think that they
would really be more successful together?

Quite honestly: I don't think so.

There is always a lot of talk about synergies in this context - but at the end
of the day, synergies often require compromises that hurt a clear profile. And
more than that: Synergies usually arise from a company's cost situation - but
of course, this is only one side of the coin. Cost cuts are only an advantage
if the performance side does not suffer. It is vital to carefully consider the
pros and cons here.

We have taken our decision: The BMW Group wants to remain independent in the
future. It is obvious that an alliance would bring us larger retail volumes.
But in my opinion, it is highly unlikely that we would remain as profitable as
we are now. Even a brand portfolio that does not mix well - premium and volume
brands within one company - can be problematic. Our own experience has taught
us that much.

Just look at our industry: There is definitely no connection between size and
profitability. Instead, there is a clear correlation between independence and
economic success.

With a Group operating margin of seven per cent in 2005, the BMW Group is one
of the most profitable manufacturers in the automotive industry. This is much
more important than being among our industry's three largest companies- or more
to the point: among those with the highest retail volume.

In a nutshell: We are successful because we are independent. And as we are
successful, we will be able to remain independent in the future.

We want to and we will manage to keep this virtuous circle going:

• We will remain independent and flexible.
• We will remain successful.
• And we will continue to be one of the world's most profitable automotive
manufacturers.

Now I wish you a nice evening and all of us interesting conversations. Thank
you very much.