BMW Group expands US plant in Spartanburg

Annual capacity to be increased to over 200,000 vehicles+++ Currency
risks will be reduced by this step+++ Munich. The BMW Group sees
further growth potential in the USA and will therefore expand its
activities in its largest single market. "We will expand the
production capacity of our US plant in Spartanburg in the medium term
from the current 140,000 to well over 200,000 vehicles per annum",
stated Norbert Reithofer, the Chairman of the Board of Management of
BMW AG at the Annual General Meeting held on Tuesday in Munich.
"This is one element of our future strategy. Taking this step will
help to lower our US dollar currency risk", he added. The adverse
impact for the BMW Group from the weak US dollar and Japanese yen in
the last financial year alone totalled euro 666 million. The group
currently manufactures the Z4 and X5 in the USA. The X6, as well as a
possible successor to the X3, are to be built there in the future.
Earnings and sales volume outlook for 2007 reaffirmed The BMW Group
remains on course in terms of the targets it has set for the current
financial year: "Adjusted for the gain on the Rolls-Royce
exchangeable bond, we wish to improve on the record pre-tax profit
result achieved in 2006", Reithofer reaffirmed. All three brands
are also forecast to achieve new sales volume records. The BMW Group
aims to increase sales volume for 2007 in the high single-digit
percentage range to over 1.4 million vehicles. The aim remains to
achieve an annual sales volume of approximately 1.6 million vehicles by
2010. Performance in the first quarter 2007 was influenced by adverse
currency factors, high raw material prices and high start-up costs for
new models. The change in reported earnings was also affected by a
significant "base effect" of euro 375 million, namely the
one-off non-cash gain arising on the partial settlement of the
exchangeable bond on shares in the British aero engine manufacturer,
Rolls-Royce plc. that was recognised in the first quarter 2006. Group
revenues increased by 2.9% to euro 11,951 million (first quarter 2006:
euro 11,618 million). The pre-tax profit fell by 34.3% to euro 852
million (first quarter 2006: euro 1,296 million). Excluding exceptional
items, group earnings fell by only 11.7%. The first-quarter profit
after tax, at euro 587 million, was 38.1% lower than the previous
year's figure of euro 948 million. Despite model changes during the
first three months of the year, the number of BMW, MINI and Rolls-Royce
brand cars sold edged up by 0.1% to 333,276 units (first quarter 2006:
332,923 unit). The sales volume is expected to rise noticeably in the
coming months thanks to new models. BMW Group achieved record earnings
in 2006 Despite the difficult conditions facing the worldwide
automobile industry, the BMW Group can look back on a successful
financial year 2006, achieving new high levels for sales volume,
revenues and earnings. The number of vehicles sold increased by 3.5% to
1,373,970 units (2005: 1,327,992 units). All three brands headed the
market in their own segments. Thanks to sales volume growth, a more
favourable model sales mix and efficiency improvements, the BMW Group
was again able to a large extent to offset the impact of adverse
exchange rates and high raw material prices amounting to more than euro
1 billion. The profit before tax rose by 25.5% to euro 4,124 million
(2005: euro 3,287 million). This includes the one-time gain on the
exchangeable bond referred to above. At an operating level (i.e.
excluding the exceptional gain), the pre-tax profit improved by 3.0%.
The net profit climbed by 28.4% to reach a new all-time high level of
euro 2,874 million (2005: euro 2,239 million). Earnings per share rose
to euro 4.38 (2005: euro 3.33) per share of common stock and to euro
4.40 (2005: euro 3.35) per share of preferred stock. Group revenues
improved by 5.0% to euro 48,999 million (2005: euro 46,656 million) on
the back of a strong sales volume performance and continued strong
growth in financial services business. Car sales volumes above
previous year's level in virtually all markets The USA continued to be
the market with the largest sales volume for the BMW Group, with a
total of 313,921 cars sold in 2006, up by 2.1% on a year-on-year basis.
A total of 816,829 cars was sold in Europe, 1.7% more than in the
previous year. Germany remained by far the most important European
market. However, due partly to the restricted availability of the MINI,
the sales volume on this market was down by 2.8% to 287,715 vehicles.
The BMW Group recorded its largest growth rates in Asia. The sales
volume there rose by 13.0% to 142,084 units. Japan is the largest
single market for the BMW Group in this region, with the number of cars
handed over to customers up by 5.6% to 62,115 units. Sharp increase in
dividend proposed In the light of the high level of profitability and
the positive outlook, the Board of Management and the Supervisory Board
are proposing a significant dividend increase at the Annual General
Meeting. BMW AG's unappropriated profit available for distribution,
totalling euro 458 million, will be used to pay a dividend of euro 0.70
for each share of common stock (2005: euro 0.64) - an increase of 9.4%
over the previous year - and euro 0.72 for each share of preferred
stock (2005: euro 0.66) - an increase of 9.1% over the previous year.
Including the share buy-back, BMW AG's shareholders will therefore
participate in the success of the BMW Group by receiving an aggregate
amount in excess of euro 700 million. New authorisation for share
buy-back proposed The Board of Management and the Supervisory Board of
BMW AG are also proposing a resolution at the Annual General Meeting to
authorise the buy-back of up to 10% of the Company's share capital. The
authorisation will again be valid for a period of 18 months. The
buy-back authorisation passed in the previous year is valid until 15
November 2007. It has not yet been decided whether or to what extent
that authorisation will be applied to buy back further shares. BMW
Welt set to open in mid-October The BMW Group will open its new
delivery centre, BMW Welt, on 17 October. The public will have the
opportunity to visit this architecturally unique building for the first
time on open days on 20 and 21 October. * * * Norbert Reithofer's
speech at the Annual General Meeting can be downloaded from the
BMW Group website at www. bmwgroup.com/ir. 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: https://newsroom.bmwgroup.com/global/en
e-mail: presse@bmwgroup.com