BMW Group Press Conference Speech at the LA Auto Show by Peter Miles, Executive Vice President of Operations, BMW of North America, LLC

BMW Group Press Conference
Los Angeles Auto Show, December 2, 2009
 
Presentation by
Peter Miles, Executive Vice President of Operations
BMW of North America, LLC

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Good afternoon and welcome to the BMW Group Press Conference.

In a moment I’ll introduce Ian Robertson, board member in charge of Sales and Marketing.  But first, a few brief highlights of 2009 in the US.

In one of the most volatile years in our economy and the automobile business, there is much discussion regarding the renewed form that our industry will take as things improve.

Here are three insights on why we feel the BMW Group in the US has successfully navigated the crisis and is well prepared for future growth.

First we have achieved our highest market share ever of the US premium segment at just over 15% with key volume models like the 3 and 5 Series continuing to outperform the competition.

Although we have been swapping the top spot in the US premium segment with a few of our competitors this year, we’ve done so in advance of a host of new BMW Group models entering into the US market.  In fact 17 new BMW models are being introduced to the market in 2009 and 2010 which include the 5 Series Gran Turismo and a number of new models we’ll be showing you here today.  And between the 2010 and 2012 calendar year, even more new BMW Group vehicles are expected to come to the US.

In addition, more BMW owners are joining the family thanks to the most successful used vehicle sales program in the premium segment.  This year we’re on target to sell just under 120,000 BMW Certified Pre Owned vehicles, up more than 10% compared to last year. This is also adding another source of vital revenue for our dealer network.

MINI continues to outperform its competition in the US. 

Market share in its competitive group is up four percentage points to 19% Year over Year.  2009 will be MINI’s second best sales result for the brand in the US - and America continues to be MINI’s largest market world-wide.  And new MINI models will continue to expand the range here.  Ian will tell you more about this in just a moment.

Second maintaining a healthy dealer network is a top priority and we enjoy a profitable and growing dealer network with one of America’s most successful automotive franchises.  Our combined average return on sales this year is around 3% and not many others can report that.

Our dealers have continued to make investments in their business while staying profitable in these difficult times. The BMW Group network has invested around

$3 billion in new facilities over the last 10 years.  This year, newly opened and refurbished BMW Group dealerships will show a combined investment of over $427 million dollars.

Third the BMW Group is responding to the needs of a rapidly changing premium segment in the US.  In this market, social and cultural shifts have driven people to make more rational purchase decisions with a higher emphasis on trusted brands that offer a strong and meaningful value proposition.

With our brands we’re fortunate that consumers recognize our enduring value.

That translates into an expanded owner body, with more vehicles offering BMW Group innovation and technology.

For most of the year the premium market tracked the results of the overall market – down on average about 25-30% each month, and it’s starting to show some signs of growth.  For the BMW Group in the US, we’ve seen a similar trend with more ups than downs.  Our November Year-to-date sales are 22% lower than 2008.

In terms of sustainability we’ll continue to build sales of our advanced Clean Diesel models as they contribute to our meeting tougher new emission regulations in the US.  As of November, Year-to-Date, the BMW X5 35d is the best selling diesel in the premium segment in the US.

Today however, I am delighted to present two BMW ActiveHybrid models for the first time in North America. First is the BMW ActiveHybrid X6 - BMW’s first Full Hybrid vehicle - meaning that it is able to operate at up to 37 mph for 1.6 miles in electric mode alone.

The ActiveHybrid X6 combines a special transmission with two integrated electric motors and a Nickel-Metal Hydride battery pack hidden under the load floor.  This hybrid system is combined with BMW’s well respected reverse flow twin-turbo V8 engine.  The total output of the drive train is 480 horsepower representing an increase of 20% over the standard X6 xDrive50i while decreasing consumption by 20%.  The BMW ActiveHybrid X6 will be on sale this weekend with an MSRP of $89,725 including Destination charge.

Second is the BMW ActiveHybrid 7.  For the 7 Series, we opted for a mild hybrid concept that offers a very respectable fuel saving of 15-17% while featuring a very small battery pack that uses only one cubic foot of luggage capacity. 

The result is that the ActiveHybrid 7 does not compromise interior space and can still carry the prerequisite four golf bags. The ActiveHybrid 7 places a 20 horsepower electric motor between the BMW reverse flow twin-turbo V-8 engine and an 8 speed automatic transmission.  This electric motor functions as a generator, a starter motor or an electric boost motor as needed.

In simple terms - At a stop light, the engine is turned off.  At steady cruise, the vehicle electrics operate off the battery pack.  On deceleration or braking, the electric motor serves as a generator to charge the battery pack.  On full acceleration, the electric motor provides 20 horsepower and 155 pounds feet of e-boost to propel the ActiveHybrid 7 from 0 to 60 miles per hour in 4.7 seconds.

I am now pleased to announce US retail pricing;  The 2011 BMW ActiveHybrid 7 will retail for $103,125 dollars for the standard wheelbase version and $107,025 dollars for the long wheelbase version.  We expect both versions to be on sale at the end of the second quarter of 2010.

An interesting note.  Our advanced powertrain models including the ActiveHybrid X6 and the X5 35d have the highest customer pre-order rates in the US of any of our vehicles as of the beginning of the 2010 model year.

These models are examples of the latest technologies developed as part of BMW EfficientDynamics…but EfficientDynamics doesn’t only refer to advanced powertrain models.  BMW EfficientDynamics has been a ten year investment in realizing small efficiency improvements from each and every vehicle system across the entire vehicle fleet, resulting in a measurable improvement in both performance and fuel consumption. 

As you will see in a moment, we’re continuing this investment with ideas for the future.

Thank you and I’d like to now welcome Ian Robertson.

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