BMW Group Investor Relations Capital Markets Day China 2010 BMW Group in China. Dr. Stark September 16, 2010 Page 1 Capital Markets Day 2010. Dr. Christoph Stark President & CEO BMW Group Region China BMW Group Investor Relations Capital Markets Day Capital Markets Day. China 2010 Dr. Stark September 16, 2010 Agenda. Page 2 Path of Growth. Recent Development. Outlook in China. BMW Group Investor Relations Capital Markets Day Road of Growth. China 2010 Dr. Stark September 16, 2010 BMW in China. Page 3 Main Locations Milestones 1994: Opening of BMW Representative Office 2003: Start of JV production Shenyang BMW Brilliance Automotive 2005: Establishment of National Sales Company Beijing 2005: Opening of Engineering Division (E-Office) NSC / Reg. Office 2006: Opening of International Purchasing Office Chengdu Reg. Office Shanghai 2009: Plant Phase II signing Reg. Office 2010: Groundbreaking of Plant Phase II Guangzhou Reg. Office Taiwan 2010: Business commencement for Auto Finance Importer: Pan German Motors Company Hong Kong Importer: BMW Concessionaires (HK) Limited BMW Group Investor Relations Capital Markets Day Road of Growth. China 2010 Dr. Stark September 16, 2010 178 BMW and 37 MINI dealer outlets in Page 4 operation YTD August 2010. Daqing Harbin Urumqi Changchun Hohhot Shenyang Panjin Beijing Anshan Erdos Yingkou Baoding Tangshan Dalian Tianjin Shijiazhuang Yinchuanu Yantai Xining Taiyuan Jinan Weifang Qingdao Lanzhou Linfen Handan Xinxiang Linyi Luoyang Zhengzhou XuzhouYancheng Xi`an Zhenjiang Hefei Changzhou Nantong Deyang Mianyang Nanjing YichangWuhan Wuxi Shanghai Wuhu Hangzhou Chengdu Outlet BMW MINI Chongqing Jinhua Ningbo Taizhou Changsha Lishui Wenzhou Nanchang North 54 10 Chenzhou Qvjing Guiyang Fuzhou Guilin East 59 12 Quanzhou Kunming Guangzhou Liuzhou Dongguan Xiamen 4S West 30 5 Foshan Shantou NanningJjiangmen Huizhou Showroom South 35 10 Zhongshan Shenzhen Workshop Total 178 37 Haikou BMW Group Investor Relations Capital Markets Day Multi-Tier Product Line. China 2010 Dr. Stark September 16, 2010 Most BMW series models are on sale in China. Page 5 Local production. Local production. BMW Group Investor Relations Capital Markets Day Multi-Tier Product Line. China 2010 Dr. Stark September 16, 2010 EfficientMarketing – special products adapted Page 6 to local market generate additional opportunities. 760Li China 60 Years Edition. EXPO Edition. 1 Series Chocolate Edition. BMW M Tiger Edition. Capital Markets Day China, Multi-Tier Product Line. Dr. Christoph Stark, September, 2010 Exciting MINI products in China. Page 7 MINI MINI Clubman MINI CABRIO MINI Countryman (coming soon) MINI Cooper Mayfair and S Camden BMW Group Investor Relations Capital Markets Day Super Sales Scores. China 2010 Dr. Stark September 16, 2010 BMW and MINI annual sales growth averaged Page 8 +40% in the last 5 years with continuing market penetration and leading positions in top segments (7 Series, X5/X6 and 5 Series GT). BMW Group retail development Dec. ? Sep. 100,000 50,000 Total (units) 24,025 36,357 51,588 65,822 90,536 106,447 *CAGR: Compound Average Growth Rate Source: Sales data BMW Group Investor Relations Capital Markets Day How did we do it? China 2010 Dr. Stark September 16, 2010 Highly committed and motivated people are key. Page 9 天时 地利 人和. • We have the RIGHT TEAM. • We have committed PARTNERS, dealers and investors who provide us with the support we need. • We are CUSTOMER ORIENTED. Mutual Trust Mutual Mutual Alignment Benefits BMW Group Investor Relations Capital Markets Day Customer Orientation. China 2010 Dr. Stark September 16, 2010 Fully dedicated to customer satisfaction. Page 10 Test Drive Experiences Quality of work performed BMW owners activities by dealer Workshop lead-time Product Quality Standardization of work and cost Higher employee Competence of retention rate at dealers Service Advisor / Waiting time at car drop-off Efficient customer care Sales Consultant and pick-up & complaint handling BMW Group Investor Relations Capital Markets Day Capital Markets Day. China 2010 Dr. Stark September 16, 2010 Agenda. Page 11 Path of Growth. Recent Development. Outlook in China. BMW Group Investor Relations Capital Markets Day Plant Expansion. China 2010 Dr. Stark September 16, 2010 The BMW Brilliance Plant Phase II is a Page 12 testimony to BMW’s commitment to the Chinese market. Upon completion of the second plant there will be a total annual production capacity of 100,000 units. Around 1,000 further jobs will be added to the 3,300 existing jobs in Shenyang. BMW Group Investor Relations Capital Markets Day The Latest Hit – BMW 5 Series LWB. China 2010 Dr. Stark September 16, 2010 The all-new BMW 5 Series LWB, tailor-made Page 13 for China, had a grand national launch in Shanghai in August. BMW Group Investor Relations Capital Markets Day The New 5 Series has been highly China 2010 Dr. Stark September 16, 2010 acclaimed by the Chinese media. Page 14 “BMW is moving together with those who have dreams.” “The Best Premium Business Sedan by Today. The All-new BMW 5 Series Long Wheelbase Proudly Enters the Market.” “The All-new BMW 5 Series Long Wheelbase Is Designed for China as Flagship Premium Car.” “The All-new BMW 5 Series Long Wheelbase is born for China.” BMW Group Investor Relations Capital Markets Day The Latest Hit – BMW 5 Series LWB. China 2010 Dr. Stark September 16, 2010 Reset the benchmark of business sedan. Page 15 1. Longest wheelbase in the segment. 2. Most efficient and dynamic performance in the segment. 3. Best in class innovation and comfort. Automatic parking assist.(USP) Night Vision with High quality interior trim and upholstery, pedestrian detection.(USP) Leather Nappa.(USP) Advanced rear seat entertainment system. Head-up Display.(USP) BMW Group Investor Relations Capital Markets Day Joy Campaign. China 2010 Dr. Stark September 16, 2010 Key success factor: Understanding and being Page 16 understood in China. BMW’s core spirit is translated in local language, and well accepted. BMW Group Investor Relations Capital Markets Day The most cherished treasure we have. China 2010 Dr. Stark September 16, 2010 In various brand surveys BMW is among the top Page 17 3 overall premium brands and the top automotive brand. We make every effort to maintain and strengthen the position of the most successful premium brand. BMW Group Investor Relations Capital Markets Day Social Responsibility – BMW Warm Heart. China 2010 Dr. Stark September 16, 2010 Continue and enhance customer-integrated Page 18 CSR. CSR Umbrella Educational Environmental Cultural Corporate Support Protection Promotion Governance • Seek cooperation • Communication of • Further Strengthen • Further involvement with higher EfficientDynamic & Culture Engagement of staff, strengthen governmental Joy Campaign & Art Promotion volunteer program departments BMW Corporate-Level Programs CCF BMW Warm Heart Fund (WHF) Dealer & Customer Integration BMW Group Investor Relations Capital Markets Day Part of China. China 2010 Dr. Stark September 16, 2010 With constant localization efforts, BMW is Page 19 deeply integrated in China. BMW Group Investor Relations Capital Markets Day Capital Markets Day. China 2010 Dr. Stark September 16, 2010 Agenda. Page 20 Path of Growth. Recent Development. Outlook in China. BMW Group Investor Relations Capital Markets Day China’s Economoc Development. China 2010 Dr. Stark September 16, 2010 As a huge market with great potential, China Page 21 has show fast and stable economic growth over the past 20 years. Source: China Statistical Yearbook GDP: trillion RMB China GDP Growth (1992-2009) GDP growth 40 16% 14.2% 14.0% 35 14% 13.1% 13.0% 30 11.6% 12% 10.9% 10.4% 10.0% 10.0% 10.1% 9.7% 25 10% 9.3% 9.1% (Ø ~20 years = 9.7%) 8.7% 8.4% 8.3% 7.8% 20 7.6% 8% GDP 33.5 15 30.1 6% GDP Growth 25.7 10 21.2 4% 18.3 16.0 13.6 12.0 5 9.9 11.0 2% 7.9 8.4 9.0 6.1 7.1 4.8 2.7 3.5 0 0% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 BMW Group Investor Relations Capital Markets Day China’s Economic Development. China 2010 Dr. Stark September 16, 2010 Despite possible temporary slow down, Page 22 China’s economy will maintain high growth in the coming 10 years, with huge growth potential for vehicle penetration. Forecast on GDP per capita in 2010-2020 (US$) Passenger Vehicle penetration vs. GDP per capita 2009 US in 2008: 46,859 14,049 12,810 Hungary in 2008: 15,542 11,670 10,496 9,414 8,421 7,447 6,525 5,672 4,861 4,228 China 2015E: ~80 China 2009: 32 2010F 2012F 2014F 2016F 2018F 2020F Note: GDP deflator in 2010-2019 is calculated as 2.5%, RMB PV/1,000 India China Brazil Russia Korea Japan Europe USA exchange rate is assumed as 4% appreciation in 2005-2010, inhabitants 3% in 2011-2015 and 1% in 2016-2020. Y 2009 24 32 108 233 267 464 508 794 Source: SIC, IMF 2009 data, World Bank BMW Group Investor Relations Capital Markets Day China’s Economic Development. China 2010 Dr. Stark September 16, 2010 A growing middle class will create solid Page 23 customer base for high-end products. No. of Income distribution Household . Middle class consumers have more trust in foreign brands and are willing to pay a premium for quality Low class Middle class Upper class Annual family income BMW Group Investor Relations Capital Markets Day China’s Economic Development. China 2010 Dr. Stark September 16, 2010 China’s urbanization strategy will generate Page 24 tremendous demand for mobility. Urbanization ratio 60.0% 45.7% 43.0% 43.9% 44.9% 40.5% 41.8% 36.2% 26.4% 17.9% 1978 1990 2000 2003 2004 2005 2006 2007 2008 2020 F Source: State Information Center Since reform and opening-up was initiated 30 years ago, China's urbanization rate has risen from around 18% to more than 45% By 2020, more than 60% of the total population will live in urban area Source: SIC BMW Group Investor Relations Capital Markets Day China’s Economic Development.