BMW at 2005 Frankfurt Motor Show - 1

BMW Group Press Conference 61st International Motor Show (IAA) cars 2005 Frankfurt, 12 September 2005

Speech by Dr Helmut Panke Chairman of the Board of Management of BMW AG

Ladies and gentlemen,

I would also like to welcome you to our BMW Group press conference here at the IAA 2005.

So what can you expect at our BMW stand?

• We’re going to show you how the BMW Group’s product initiative has evolved since the last IAA in 2003. • And with four new BMW brand vehicles we’re going to give you a preview of where our current product initiative is headed.

Let’s go straight to what’s been happening within the BMW Group since the last IAA:

To begin with, the BMW Group has developed very rapidly since September 2003. Back then, we announced that one of the goals we were pursuing with our product initiative was to reach a new order of magnitude. Today – two years later – we’ve already come a lot closer to this goal. This becomes especially obvious when we look at the growth of both our product portfolio and our retail volume during the past two years.

What have we specifically been up to these past two years? Here are some highlights:

• At the beginning of 2004, we started launching the BMW X3 and the new BMW 6 Series Coupe. • Next, came the BMW 6 Series Convertible at the end of March 2004. • The BMW 5 Series Touring was available to our customers as of mid-May 2004. • In July and August 2004 the spotlight was on our new MINI Convertible. • Starting in September 2004 we launched the new BMW 1 Series. • Our first highlight in 2005 was the new BMW 3 Series Sedan which was rolled out in March. • It was immediately followed by our BMW 7 Series model update in April 2005. • Also in April this year, we launched the new BMW M5 and the BMW M6.

All in all, the BMW Group has rolled out ten new models since the last IAA. During the same period we also updated three of our key models and introduced a total of 18 new engines.

The bottom line is that the BMW Group’s product initiative has had a substantial impact, especially during those last two years since the IAA 2003. If you take a look around our stand today you’ll notice that hardly any of these vehicles were around two years ago. We’ve been continually updating our product portfolio, and on top of that, we’ve expanded into new segments as well.

Consequently, the BMW Group’s retail volume has increased significantly since the IAA 2003:

• Back then, we had sold 712,000 automobiles as of August 2003. • This year, we have sold over 856,000 automobiles as of August 2005. That is an increase of about 144,000 vehicles – in other words, a 20 percent growth in retail volume within two years.

Clearly, our product initiative has led to rising sales. But of course, that’s not just because we offer our customers new products. The core of our success remains the unique strength and high desirability of our brands.

MINI, BMW or Rolls-Royce – the key is that we continue to offer authentic premium products of substance.

Our customers will always be able to count on us to meet their expectations. One of the advantages of our premium strategy is that everybody can understand it. A customer doesn’t just happen to buy a BMW – he buys a BMW because the brand stands for certain basic characteristics that he desires. The same is true for our MINI und Rolls-Royce brands. They may feature different basic characteristics, but they too are strong brands with distinct profiles, holding specific promises.

All of our products satisfy the highest demands. They feature highly advanced technology and, most important, a strong emotional appeal. And that is not about to change – we’re never going to build a boring car!

Ladies and gentlemen,

This philosophy is illustrated by what you can see here at our stand. Today, we present to you four new BMW brand vehicles that provide a preview of where our product initiative is headed in the near future.

Let me begin with the new BMW 130i, our autumn addition to the BMW 1 Series portfolio. The new 3.0 liter inline six-cylinder brings high-end performance to the compact class.

From the beginning, it was our goal to offer a particularly sporty product in the compact class. Even our engine versions to date have kept this promise. Our retail figures in this rapidly growing segment reflect this as well. Since the launch of our BMW 1 Series, we’ve delivered more than 136,000 vehicles of this model series to our customers.

With the new 130i we want to entice those customers who want to see the sporting flair of this model series taken to the next level. We expect that this engine version will provide an additional boost to the BMW 1 Series. Our goal is to keep expanding our share of the compact segment with the BMW 1 Series.

On to our second innovation: the BMW 3 Series Touring, which is celebrating its world premiere here in Frankfurt. The BMW 3 Series is without a doubt one of the BMW brand’s most important model series. Last year, 44 percent of all BMWs sold worldwide belonged to this model series. The BMW 3 Series Touring has become especially significant. Approximately 17 percent of all BMW 3 Series cars sold last year were Touring.

Our previous BMW 3 Series Touring model sold 428,000 units worldwide during its lifecycle. We expect that this new generation of the BMW 3 Series Touring will set a new record.

The continuing success of the BMW 3 Series Touring is primarily due to the fact that more and more customers want greater spatial flexibility but don’t want to sacrifice sporty attributes. For those people, the 3 Series Touring is the ideal car.

The new BMW 3 Series Touring is yet another step in updating the BMW 3 Series. Our goal is clear: we want to keep expanding our share of the segment and further expand our leading position in this segment.

This brings us to the third vehicle that we want to introduce to you here in Frankfurt: the BMW Concept X3 EfficientDynamics.

Engine building is one of the BMW Group’s core competencies. For the BMW brand, for example, a sporty yet efficient engine is always an essential part of the “ultimate driving machine.”

When you take a look around our stand you’ll find numerous examples that illustrate our expertise in engine construction. Whether you’re looking at our latest gasoline engines or our latest diesel engines – they all stand for the “ultimate driving machine.”

Our ongoing progress in engine development is also due to that fact that we’re very open toward new technologies.

The question that underlies the BMW Concept X3 EfficientDynamics is: how can we combine sporting flair and hybrid technology in a BMW-typical fashion? The result is a study that integrates an array of drivetrain features. In their totality, these features highlight the BMW virtue of dynamic performance while significantly improving efficiency.

The key characteristic of the BMW Concept X3 EfficientDynamics – and the main difference to previous solutions – is the space-optimizing use of a drive with an electric motor and integrated power electronics, as well as high-performance condensers – so-called supercaps – for energy storage.

This hybrid technology connects BMW to the best engine technology available, a gasoline injection technology called “High Precision Injection” which will be introduced in the next few years. It is the first spray-guided gasoline direct injection system suited to mass production, and it makes it possible to exploit the full consumption potential – something that currently available solutions have been unable to accomplish.

While this vehicle won’t go into series production in this form, it does provide a preview of possible future developments. The ultimate driving machine could certainly be a hybrid.

One quick note in this regard: The BMW Group, DaimlerChrysler AG and the General Motors Corporation have formed an alliance of equal partners and signed a “Memorandum of Understanding”. Its goal is the joint development of hybrid drives. These three global automobile manufacturers will join forces and combine their know-how in order to pursue the development of tomorrow’s hybrid drives more efficiently and more quickly.

Ladies and gentlemen,

This brings us to our fourth innovation, which is still concealed at this time.

I’ll be brief: We know that the sports compact segment continues to grow. But that’s not the only reason why the BMW brand is offering a new two-seater sports car.

Vehicles like this have a special emotional resonance among car enthusiasts. And that’s why, in keeping with our tradition of offering emotionally appealing automobiles, we brought our concept study of a BMW Z4 Coupe with us to the IAA.

Let me make it clear that this is a concept study, not a series vehicle – although we will definitely build a BMW Z4 Coupé.

Once the cover has been lifted you’ll see that we’ve done much more than simply put a roof on our BMW Z4 Roadster. Basically this is a vehicle that doesn’t require many words. It’s much better to see it than to talk about it.

Therefore, I’ll end my remarks at this point. Thanks for listening. I hope you will continue to enjoy the IAA 2005. And now, I’m proud to present our concept study BMW Z4 Coupé.