Speech by Dr. Norbert Reithofer - BMW Group Press Night Auto Shanghai 2007

Ladies and Gentlemen - I am delighted to see that so many of you have
accepted our invitation to this Press Evening. This is true for our
guests from Chinese Mainland as well as our guests from Europe and the
US, who have had such a long trip. Thank you very much for coming here
this evening. Motor shows are usually pretty hectic places, and the
Auto Shanghai is no exception. There is never enough time to talk in
more detail about what we present at the motor show. This is why we
have invited you here tonight. We would like to give you an exclusive
preview of the major topics for the BMW Group. Afterwards, we will have
more time to discuss these topics with you. Let me now move onto
matters that go beyond our daily business. Last month, we presented
our key data for the business year 2006 at our Annual Balance-Sheet
Press Conference. 2006 was the most successful year in our corporate
history. We again strengthened our position as the world's leading
premium manufacturer in the automotive industry. However: A company's
strength is not only reflected in its economic key data. A company's
strength also lies in the future, otherwise it lacks continuity. And it
is hard - if not impossible - to see a company's future orientation only
from its balance sheet. It is simply a fact that financial data always
focus on the past. They present what a company has achieved. In order
to evaluate a company's future potential, we have to ask different
questions. Questions that go beyond the data presented in the annual
accounts. • Does the product portfolio correspond to the
customers' demands? • Has the company made investments that
provide the foundation for making best use of upcoming opportunities?
• Are employees highly motivated? Is there a company culture that
promotes entrepreneurial thinking and acting? • Is the company
well-positioned in all relevant markets? • Has the company
considered all important trends in its sector - and if so, is it
prepared for them? • And last but not least: Does the company act
in a responsible and future-oriented way? Is it willing to assume
social responsibility as a good corporate citizen? Ladies and
Gentlemen - As experts yourself, I am sure that you could easily add to
this list of questions. But what it comes down to is: Does a company
show promise for the future or not? Or in other words: Is it well
prepared for the challenges ahead? For the BMW Group, I can state:
"We are well prepared for the future!" Why am I so sure
about this? Let me give you three examples: Example 1: Our products.
It is a matter of course that tomorrow, when you visit our stand, the
spotlight will be on our products. They represent all that defines our
three brands BMW, MINI and Rolls-Royce - extraordinarily high product
substance that distinguishes us from our competitors. We use exclusive
materials. We offer first-class workmanship and trendsetting designs.
And we offer one-of-a-kind quality. Add to this, our products' unique
technology and outstanding driving performance sets us apart in the
area with regards to acceleration power as well as fuel consumption.
But there is one more thing. Our products offer something that makes
them truly unique: Emotions! Our intention is not simply to help our
customers to get from A to B. We also want our customers to have fun,
to actually enjoy the drive and ride from A to B - with a very
exceptional and outstanding vehicle. It is not just about providing
people with a means of transportation. It is in fact much more that
that: We have products people desire, and even dream of owning. This
is our strength: To fulfil desires and dreams. And most notably: We
fulfil these desires in all relevant premium segments of the automotive
industry. With our three brands MINI, BMW and Rolls-Royce, our
positioning is excellent. From the small car to the ultra-luxury
automobile - there is no gap in our model range. The BMW Group's brand
and product portfolio is structured clearly and logically. It is never
static, though. Wherever we see new opportunities for us, we evaluate
them carefully and act accordingly if necessary. This is how we
establish the prerequisites for our future success. We frequently
refine our range. This is to say: We always launch new products when we
see lasting potential for them. Just think about the BMW brand's Sports
Activity Vehicles - our X5 and our X3. Or think about the BMW 1 Series
and 6 Series we introduced a while ago. Current examples from our
brands MINI and Rolls-Royce include the MINI Clubman that has already
been announced or the Rolls-Royce Drophead Coupe. Both are new products
that help us to refine and expand our model portfolio. Ladies and
Gentlemen - That the BMW Group is well prepared for the future is also
demonstrated by my second example: our international market presence.
The BMW Group is a German manufacturer and excellently represented in
Europe. At the same time, we started to gradually strengthen our
international presence beyond Europe decades ago. Just to give you
one example: In 1975, we set up a subsidiary in the US and opened a
plant there in 1994. This is how we established our presence in the
world's largest automotive market. Since then, the importance of this
market has grown continuously: Today, the US is our most important
individual market, just ahead of our home market Germany. In 1981, we
were the first European manufacturer to establish a subsidiary in Japan
- and contrary to some other companies, we stayed there during the Asian
crisis. Back then, hardly anyone understood that. Today, we benefit from
this decision. At present, Japan is our strongest market in Asia. Of
course, this might change in the coming years. You don't have to look at
the impressive skyline of Pudong to understand that Chinese Mainland
with its high growth rates is on its way to becoming one of the world's
most important automotive markets. For us, it has been obvious for a
couple of years now that Chinese Mainland will play an important role
for the BMW Group in the long term. According to our principle
"Production follows the market", we have started a sales and
production joint-venture at Shenyang. We have thus strengthened our
position here in Chinese Mainland and are better prepared for the
future growth of this market. And success proves us right: Over the
last five years, the BMW brand alone has risen by more than 750 per
cent in Chinese Mainland. No other major premium brand achieves such
dynamic growth rates in this market. Our vehicles are extremely
popular in China. The BMW brand in particular benefits from its great
image here. And we even have a special product for this market that is
not offered anyplace else - the long version of our BMW 5 Series. Why
is that? Because our customers in Chinese Mainland demand such a
vehicle. And if you intend to be successful in such an important market
in the long term, you have to listen to your customers. In a
nutshell: We are convinced that Chinese Mainland will be one of our key
markets in the long run. And we are prepared excellently for
participating in the future growth potential of this market! The next
step towards the future was taken just a few weeks ago - when we opened
our subsidiary and a production location in India. In the long term,
India is a promising market with great growth potential. Therefore, it
is right to set up shop there now. Our philosophy is: We want to be
present wherever we see a long-term potential for our premium products.
As the world's most dynamic region, Asia is currently a main focus of
our activities. It is our goal to increase our retail volume in the
region to 150,000 vehicles by next year. And we are convinced that the
entire Asian region will become the fourth mainstay of our global
business - complementing Germany, Western Europe and North America.
Concerning our international market presence I can confidently say: We
are in an excellent position to participate to the full extent in the
future growth of the different markets and regions. Ladies and
Gentlemen - Let's move on to my third example: handling trends and
innovations. You all know about the important role climate protection
plays right now. And rightly so - because climate change is a major
challenge for all of us - including the automotive industry. And the
way we master this challenge will determine the future development of
the automotive industry as well as the success or failure of the
individual manufacturers. We have a clear answer to this challenge:
"BMW EfficientDynamics". With this concept, we resolve the
supposed conflict between "efficiency" and
"dynamics". We do so by applying an entire range of measures:
• First of all, there is the continuous optimization of the
powertrain. • Generally, the concept is about intelligent
solutions for the entire vehicle energy management. •
Light-weight construction contributes to efficiency as does
aerodynamics. • Keyword hybrid: In the medium term, this will, of
course, also be an element of "BMW EfficientDynamics". We
have just entered into a new cooperation with DaimlerChrysler. Together
we are going to develop hybrid components in Germany. In the long
term, we consider hydrogen the solution for individual mobility. We
have already achieved a lot in this field. The Hydrogen 7 demonstrates a
viable solution for the future. Together these measures make up
"BMW EfficientDynamics", which is our solution to the climate
challenge facing all of us. At the same time, "BMW
EfficientDynamics" is proof that we deal with vital trends in our
industry at a very early stage. The main point here is to distinguish
between short-lived fads and real long-term trends. In the first case,
there is no need to be part of it. But those who ignore real trends miss
out on long-term opportunities within their competitive environment.
Meeting real trends by offering relevant innovations - this is our goal,
concerning climate protection as well as many other issues: •
Think about vehicle service elements. • But also think about safety
features. • Driver assistance systems play a role here. • And
of course, design is another important aspect to consider. But the core
of the matter is: Which qualities and characteristics will our vehicles
have to offer a few years from now in order to be successful in our
markets? I am sure you realize that in our industry, development
cycles are longer than in other lines of business. Therefore, we have
to recognize trends early on and have to act accordingly. This is a
long-term, future-oriented approach. From today's point of view, I can
state: We do not see any trend in the coming years that we are not
prepared for. Recognizing and following trends is one of our company's
key strengths. And in the past, our products have frequently
demonstrated that. Whether you look at BMW, MINI or Rolls-Royce - our
model portfolio is so popular, among other things, because these
vehicles set trends instead of playing catch-up. Ladies and Gentlemen
- These are three examples to substantiate why we can say: "We are
well prepared for the future!" At present, we are the leading
premium manufacturer, and we are on the right track for remaining
successful in the future. We are future-oriented - this is our
strength. Tomorrow you will be able to see how far our future-oriented
thinking actually goes. Because this is when we are going to present,
among other things, our BMW Concept CS. Of course I realize that this
concept car in particular is of major interest to many of you. And of
course I don't want to disappoint you. So we thought we would offer you
a glimpse at this impressive vehicle here. Let's begin the film!
Ladies and Gentlemen - I suppose you agree with me when I say:
Tomorrow, this vehicle will be one of the highlights at the Auto
Shanghai 2007. What can I already tell you about this vehicle? 1. The
BMW Concept CS is a clear symbol for the BMW brand's desirability. It is
a vehicle that inspires people. It stands for "sheer driving
pleasure" in its purest form. And it shows our characteristic BMW
interpretation of a Gran Turismo that combines driving pleasure and
travel comfort. 2. This BMW Concept CS also stands for a further
development of our design language. Design is a very distinguishing
feature for BMW, and this is not going to change. Our customers want a
face that stands out in a crowd. Our expertise in this field is further
underlined by this concept car. With our last leap in design a few
years ago, we clearly broke away from competitors. We frequently see
that other manufacturers follow our design language more closely. Now,
we are starting the next round. This is how the next step in the
evolutionary development of our design language could look like. 3.
With this concept car, we also show that generally there is still a lot
of expansion potential at the BMW brand. Many things are possible. We
will not necessarily launch all the products people speculate about.
But our competitors should not feel too safe. We still have a lot in
the pipeline. I think this is enough information for now. I invite you
all to take a very close look at this vehicle tomorrow. There are lots
of things for you to discover! And now I am very much looking forward
to spending this evening with you. Thank you very much for your attention.