Bmw investor presentation

92
BMW Group Investor Presentation September 2009

Transcript of Bmw investor presentation

Page 1: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 1

BMW Group Investor Presentation

September 2009

Page 2: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 2

BMW Group.Key figures H1-2009.

Euro million 20091 Jan. -

30 June2008

1 Jan. –

30JuneChange

in %

Revenues 24,480 27,837 -12.1

Loss / profit before financial result (EBIT) 114 1,252 -90.9

Automobiles -282 1,014 -

Motorcycles 54 92 -41.3

Financial Services 145 118 22.9

Other entities 38 124 -69.4

Eliminations 159 -96 -

Loss / profit before tax -47 1,243 -

Net loss / net profit -31 994 -

EPS in Euro (common / preferred) -0.05/-0.04 1.52/1.53 -/-

Operating Cash flow (Automobiles) 2,109 2,383 -11.5

Equity 20,162 22,019 -8.4

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BMW GroupInvestor PresentationSeptember 2009Page 3

BMW Group Update. Successful financial management in H1-2009.

Proactive, foresighted financial management:

Net current assets and other items*:reduced by EUR 1,607 million

Free cash flow*: EUR 516 million

Net interest bearing assets*: EUR 10,041 million

Group liquidity: EUR 11,989 million

*Automobiles Segment

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BMW GroupInvestor PresentationSeptember 2009Page 4

BMW Group Update. Outlook and action for 2009.

Focused cost management is the top priority.

Increased efforts to reduce material costs(more than EUR 4 billion) until 2012.

EUR 500 million cost savings from headcount reduction from 2009 onwards.

Optimization of capital employed.

Reduction of capital expenditure without sacrificing investment in the future.

Continuation of strict working capital and free cash flow management.

Resolute pursuit of strategy Number ONE.

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BMW GroupInvestor PresentationSeptember 2009Page 5

BMW Group Update. Targets and guidance.

Due to the considerable uncertainty about how the global economy will develop from here, it is currently impossible to make stable forecasts for the year 2009.

We expect the entire industry’s global auto sales to drop by 10 to 20 % in 2009 and pick up over the course of 2010.

We are assuming that we will be unable to match last year´s sales figure. But we want to assert or expand our segment share in the single markets.

We remain committed to achieving our profitability and FCF targets for 2012!

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BMW GroupInvestor PresentationSeptember 2009Page 6

BMW Group Strategy. Core elements of our corporate strategy.

Financial Strategy

Process management:

Flexibility in production

Component

exchange

Networking

Premium Brand Strategy:

Focus on premium segments in the automobile and

motorcycle market

Strategic Realignment

Sustainability & Efficient Dynamics

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BMW GroupInvestor PresentationSeptember 2009Page 7

BMW Group Strategy. Strategic objective.

The BMW Group is the leading provider of premium products and premium services for individual mobility.

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BMW GroupInvestor PresentationSeptember 2009Page 8

BMW Group Strategy. The way ahead –

Number ONE.

Number ONE definesour vision for the year 2020.

our mid-term targets for the year 2012.

our internal milestones.

Our vision is targeted towards creating value and securing future success. We are driven by our goal to increase profitability.

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BMW GroupInvestor PresentationSeptember 2009Page 9

BMW Group Strategy. Targets 2012.

Group 2006 2012

Auto Sales (‘000 units) 1,374 -

Motorcycle Sales (‘000 units) 100 1501)

R&D ratio (%) 6.5 5.0 –

5.5

Capex ratio (%) 8.8 <7.0

Dividend (euro, common/prefered) 0.70/0.72 substantial increase

Automobiles Segment

RoCE (%) 21.7 >26

Return on Sales (EBIT, %) 6.4 8 –

10

Free Cash Flow (euro million) 9562) >2,0002)

Free Cash Flow from Industrial Operations1)

Projected growth until 2012 includes Husqvarna brand sales

Page 10: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 10

BMW Group Strategy. Improvement of R&D ratio.

R&D ratio: R&D Expenditure (HGB) / Revenues

6.5%

6.0%

5.5%

5.0%

4.5% 4.9%

5.8%

6.2%

6.4%6.7%

6.5%

5.6%

2001 2002 2003 2004 2005 2006 2007 2012

7.0%

4.0%

2008

5.4%

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BMW GroupInvestor PresentationSeptember 2009Page 11

BMW Group Strategy. Improvement of capex ratio.

Capex ratio: Total Capex / Revenues

11.0%

10.0%

9.0%

8.0%

9.1%9.5%

10.2%9.8%

8.6%

8.8%

2001

Target: <7%

7.6%7.0%

2002 2003 2004 2005 2006 2007 2012

6.0%

2008

7.9%

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BMW GroupInvestor PresentationSeptember 2009Page 12

BMW Group Strategy. Reduction of material costs.

The material costs represent the biggest cost pool.We want to achieve significant cost reductions in the supply chain. We will not only negotiate harder but we will work close together with the suppliers to ensure sustainable cost reductions.We will implement the efficiency-enhancement measures in all future product and technology projects.

~€

44bn* Cost of sales

~€

24bn*

*2008 figures

Material costs

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BMW GroupInvestor PresentationSeptember 2009Page 13

BMW Group Strategy. Efficiency improvements.

Expenses/fixed costs/R&D:

€2bn or 1/3 of the total potential

Cost of materials/purchasing:

>€4bn or at least 2/3 of the total potential

2008 2009 2010 2011 2012

6,000

5,000

4,000

3,000

2,000

1,000

0Cost of materials / purchasing

Expenses / fixed costs / R&D

7,000

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BMW GroupInvestor PresentationSeptember 2009Page 14

Significant increase in purchasing volume in the NAFTA region

(based on 13% of total purchasing in 2008).

BMW Group Strategy. Natural hedging.

Shenyang

Oxford

Spartanburg240k150k

+60%

260k200k

+30%

44k30k

+47%

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BMW GroupInvestor PresentationSeptember 2009Page 15

BMW Group Strategy. Core elements of our corporate strategy.

Financial Strategy

Process management:

Flexibility in production

Component

exchange

Networking

Premium Brand Strategy:

Focus on premium segments in the automobile and

motorcycle market

Strategic Realignment

Sustainability

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BMW GroupInvestor PresentationSeptember 2009Page 16

BMW Group Automobiles. Three authentic premium brands.

The world’s most exciting premium small car brand

Sheer driving pleasure

The pinnacle of automobile luxury

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BMW GroupInvestor PresentationSeptember 2009Page 17

BMW Group Automobiles. Growth with new models.

Expansion of BMW X model series with BMW X6 and X1

BMW 5 series Gran Turismo

Rolls-Royce Phantom Coupe

Expansion of Rolls-Royce range with smaller model

MINI Crossover Concept

Project i

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BMW GroupInvestor PresentationSeptember 2009Page 18

USA

Eastern Europe

IndiaChina

Russia

BMW Group Automobiles. Priority on growth markets.

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BMW GroupInvestor PresentationSeptember 2009Page 19

BMW Group Automobiles.Deliveries to customers through July 2009.

Deliveries of automobilesin units 2009 ytd. 2008 ytd. Change in %

Total BMW 604,190 744,025 -18.8

1 series 128,822 137,570 -6.4

3 series 226,803 298,568 -24.0

5 series 99,631 124,830 -20.2

6 series 5,625 11,210 -49.8

7 series 25,112 23,175 8.4

X3 32,498 54,113 -39.9

X5 50,698 72,699 -30.3

X6 23,561 8,696 170.9

Z4 11,440 13,164 -13.1

Total MINI 120,813 146,040 -17.3

Total Rolls-Royce 374 597 -37.4

BMW Group 725,377 890,662 -18.6

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BMW GroupInvestor PresentationSeptember 2009Page 20

BMW Group Automobiles.Premium segment sales vs. BMW Group retail sales development (month on month).

BMW Group retail salesPremium Segment sales

(estimates)

2008 2009

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BMW GroupInvestor PresentationSeptember 2009Page 21

BMW Group Automobiles.Deliveries to customers 2008.

Deliveries of automobilesin units 2008 2007 Change in %

Total BMW 1,202,239 1,276,793 -5.8%

1 series 225,095 165,803 35.8%

3 series 474,208 555,219 -14.6%

5 series 202,287 230,845 -12.4%

6 series 16,299 19,626 -17.0%

7 series 38,836 44,421 -12.6%

X3 84,440 111,879 -24.5%

X5 116,489 120,617 -3.4%

X6 26,580 0 -

Z4 18,005 28,383 -36.6%

Total MINI 232,425 222,875 4.3%

Total Rolls-Royce 1,212 1,010 20.0%

BMW Group 1,435,876 1,500,678 -4.3%

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BMW GroupInvestor PresentationSeptember 2009Page 22

BMW Group Automobiles. BMW and MINI retail by model 2008 (2007).

Total BMW 1 Series 3 Series 5 Series 6 Series 7 Series X3 X5 Z4

1,202,239

(1,276,793)

100% 18.7% 39.4% 16.8% 1.4% 3.2% 7.0% 9.7% 1.5%

225,095

(165,803)

474,208

(555,219)

202,287

(230,845) 16,299

(19,626)

38,836

(44,421) 84,440

(111,879)

18,005

(28,383)

MINI retail by model 2008 (2007).

(100%) (13.0%) (43.5%) (18.1%) (1.5%) (3.5%) (8.8%) (9.4%) (2.2%)

X6

2.2%

116,489

(120,617)

26,580

Total MINIOne, One D Cooper Cooper D Cooper S Convert. Clubman

232,425

(222,875)

100% 11.8% 26.6% 12.7% 16.8% 10.0% 20.3%

27,488

(35,720)

61,934

(77,124)

29,581

(21,764)

43,132

(48,245)

23,208

(35,108)

47,082

(4,914)

(100%) (16.0%) (34.6%) (9.8%) (21.6%) (15.8%) (2.2%)

Total BMW Group sales: 1,435,476 (1,500,678) units.BMW brand share: 1,202,239 (1,276,793) units or 83.8% (85.1%) of

total sales.

MINI brand share: 232,425 (222,875) units or 16.2% (14.9%) of total sales.

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BMW GroupInvestor PresentationSeptember 2009Page 23

Sedan Wagon Hatch Coupe Convert. Roadster New Seg. SAV

BMW Group Automobiles. Brand and product overview.

Plus

Base

Plus

PlusPlus

Base

7 Series 6 Series 6 Series

Plus

Base

Luxury

Compact

Lower

Medium

Small

Plus

Base

Upper

Medium

Base

Plus

PlusPlus

Convert.Phantom Coupe

3 Series 3 Series 3 SeriesZ4 Z4 X33 Series

MINIMINI MINI

1 Series 1 Series 1 Series

X5, X65 Series 5 Series GT

New products to be launched until 2012

X1

Page 24: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 24

BMW Group Automobiles. Current models –

lifecycle overview.

1 Series

X Models

MINI

5 Series

3 Series

6 Series

7 Series

2004 2005 2006 2007 2010 -

2012

Rolls Royce

Z4

Phantom Drophead Coupé

Sedan

Cooper / Cooper S

One / Cooper D

LCI

3 door hatch5 door hatch

Touring

Coupe

Convert.

LCI

X5 NG

Coupe

Convert.

Touring

X3 LCI

LCI

Coupe

LCI

*LCI: Lifecycle

Impulse

Clubman

LCI

Coupe

X6

GT

Sedan NG

M3 Coupe

M3 Sedan, Convert.

Phantom Coupé

Crossover

Convert.

X6 Active Hybrid

X3 NG

NG

LCI Sedan/Touring

X1

NG

NG

Convertible

Active Hybrid

MINI E

2008

NG

NG

Ghost

2009

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BMW GroupInvestor PresentationSeptember 2009Page 25

3%

10%

20%

40%

>60%

0%

10%

20%

30%

40%

50%

60%

70%

2008 2009 2010 2011 20120.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

BMW Group Automobiles. Model renewal rate.

Ø age of product portfolio

(sales & mix adjusted)

Cumulated Model Renewal Rate (as % of total expected annual sales volume)

3.3 years

2.6 years

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BMW GroupInvestor PresentationSeptember 2009Page 26

BMW Group Automobiles. Product overview MINI.

Launch 03/2009

MINI Clubman.

MINI Hatch. MINI Convertible.

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BMW GroupInvestor PresentationSeptember 2009Page 27

BMW Group Automobiles. New product 2008.

BMW 7 series

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BMW GroupInvestor PresentationSeptember 2009Page 28

BMW Group Automobiles. New product 2009.

Launch 05/2009BMW Z4

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BMW GroupInvestor PresentationSeptember 2009Page 29

BMW Group Automobiles. New product 2009.

BMW X1Launch 10/2009

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BMW GroupInvestor PresentationSeptember 2009Page 30

BMW Group Automobiles. New product 2009.

BMW 5 series Gran TurismoLaunch 10/2009

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BMW GroupInvestor PresentationSeptember 2009Page 31

BMW Group Automobiles. BMW Advanced Diesel with Blue Performance.

X5 Xdrive 35dEmission Standard LEVII / Bin5

265 hp, 0-60 mph < 7.4s

Fuel consumption > 27 mpg (USC)

335dEmission Standard LEVII / Bin5

265 hp, 0-60 mph < 6.2s

Fuel consumption > 33 mpg (USC)

US market introduction: December 2008

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BMW GroupInvestor PresentationSeptember 2009Page 32

BMW Group Automobiles. BMW Active Hybrid.

US Market introduction: End of 2009 (EU: 04/2010)

X6 Active HybridFull (Two-Mode) Hybrid system

Emission Standard ULEVII / EU5

System Power: 485 hp, 0-60 mph: 5.6s

Consumption: 9.9l/100km (28.5mpg)(-20% compared to base X6 xdrive 50i)

7 series Active HybridMild Hybrid system

Emission Standard ULEVII / EU5

System Power: 465 hp, 0-60 mph: 4.9s

Consumption 9.4l/100km (29.1mpg)(-15% compared to base 750li)

US Market introduction: End of 2009 (EU: 04/2010)

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BMW GroupInvestor PresentationSeptember 2009Page 33

BMW Group Automobiles. The worldwide premium segment is expected

to grow to 8.2mn units p.a. in 2022.

Source: Global Insight

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Region

(‘000 units) 2008 2022 Chg.World 5,836 8,220 41%

China* 342 914 167%

Asia, Pacific & Africa 526 932 77%

Americas 1,921 2,519 31%

Europe (ex Germany) 2,086 2,737 31%

Germany 954 1,107 16%

CAGR +2.0%

CAGR +2.0%

CAGR +4.2%

CAGR +7.3%

CAGR +1.1%

Premium Segment:

CAGR

2008-2022: 2.5%

Total Growth

2008-2022: 41%

*China includes Mainland China, Hong Kong and Taiwan

Page 34: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 34

BMW Group Automobiles. Premium segment growth in emerging

markets.Source: Global Insight, in ‘000 units

1) China includes Mainland China, Hong Kong and Taiwan2) GCC: Gulf Cooperation Council: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates3) New EU Countries: Bulgaria, Estonia, Latvia, Lithuania, Poland, Rumania, Slovakia, Slovenia, Czech Republic, Hungary4) Latin America: Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Puerto Rico, Uruguay, Venezuela

572

105

9170

0

100

200

300

400

500

600

700

800

900

1,000

China1) Russia GCC2) New EU

Countries3)

Latin

America4)

South Korea Ukraine India Malaysia Thailand

167.3%

65.6%

98.2%85.0%

19.3% 91.0%44.2% 694.2% 188.8% 181.8%

2008 Sales Sales Forecast by 2022

342

159

93 8261

3822 8 9 7

914

264

184151

72 7232

62 27 20

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BMW GroupInvestor PresentationSeptember 2009Page 35

Ge

rman

y

Un

ite

d K

ing

do

m

Ital

y

US

A

Fra

nce

Ru

ssia

Ch

ina

Jap

an

RoW

0%

5%

10%

15%

20%

25%

30%

35%

BMW Group Automobiles. Premium segment share of total market.

World Average: 9.3%

Premium Segment Share of Total Market

2008

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BMW GroupInvestor PresentationSeptember 2009Page 36

Price (€)ENDURO TOUR

R 1200 RT

20,000

10,000

R 1200 GS

Adventure

F 800 ST

F 650 GS (2 Cyl.)G 650 X

Challenge

G 450 X

R 1200 GS

F 800 GS

2 Cyl.

URBAN

K 1300 RR 1200 R

G 650 X Country

G 650 XMoto

SPORT

F 800 S

HP2 Sport

HP2 Megamoto

G 650 GS (1 Cyl.)

K 1300 S

K 1300 GT

F 800 R

BMW Group Motorcycles. Product overview.

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BMW GroupInvestor PresentationSeptember 2009Page 37

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2012

BMW Group Motorcycles. Retail unit sales 1990–

2012.

units

* Projected growth until 2012 includes Husqvarna brand sales.*

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BMW GroupInvestor PresentationSeptember 2009Page 38

BMW Group Financial Services. Global presence in 54 countries with 4,000 employees.

BMW Financial Services

MINI Financial Services

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BMW GroupInvestor PresentationSeptember 2009Page 39

BMW Group Financial Services. Leasing has multiple benefits for the BMW

Group.

Cash buyers

61.6 months (1)

Leasing

36.2 months (1)

Year 1 Year 12

(1) average ownership cycle in Germany; (2)German market, 2006 data

9,838

7,115

0 2,000 4,000 6,000 8,000 10,000 12,000

Leasing

Cash buyer

Average level of optional equipment in Germany (Example, in EUR):

+ 38 %Basis: German market, 9.000 customers, all model lines, 2006 data

Loyalty Rates (2)

75.2%

62.7%

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BMW GroupInvestor PresentationSeptember 2009Page 40

345387

422

515

605

685743

-292

452

-400

-200

0

200

400

600

800

2000 2001 2002 2003 2004 2005 2006 2007 2008

BMW Group Financial Services. Profit before Tax (PbT) Financial Services.

in million Euro

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BMW GroupInvestor PresentationSeptember 2009Page 41

BMW Group Financial Services. Additional risk provisions in 2008.

Automobiles Segment:EUR 911 millionresidual values

FinancialServicessegment: EUR 1,057 million

EUR 694 millionresidual values

EUR 363 millioncredit losses

Total: EUR 1,968 million

Page 42: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 42

BMW Group Financial Services. Penetration rate retail business.

34.5% 35.0% 36.1%

38.3%42.0% 41.1%

42.4%

46.4%

48.5%47.0%

44.6%

Page 43: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 43

BMW Group Financial Services. Development of credit loss rates.

0.54%

0.46%

0.41%

0.37%

0.41%

0.46%

0.59%

0.74%

0.35%

0.40%

0.45%

0.50%

0.55%

0.60%

0.65%

0.70%

0.75%

0.80%

2002 2003 2004 2005 2006 2007 2008 H1-2009

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BMW GroupInvestor PresentationSeptember 2009Page 44

BMW received The Automotive Leasing Guide (ALG) Residual Value Award in 2004, 2005 and 2006 for “the highest predicted resale value of any luxury brand”.

BMW was named “Best Brand”

in Kelley Blue Book’s 2005 and 2006 “Best Resale Value Awards”.

2009 BMW X5 awarded by Kelley Blue Book for “Best resale value in the Luxury Crossover Segment”.

50 %

52 %

58 %

54 %

56 %

98/01 99/02 00/03 01/04 02/05 03/06 04/07 06/0905/08

55 % 55 % 57 % 54 % 55 % 54 %

54 %54 %

55 %55 %

54 %54 %

52 %52 %

53 %53 %

52 %52 % 52 %52 %

51 %51 % 51 %51 %

3 year old retention36 months residual value (ALG)

BMW Group Financial Services. Resale value development in the USA.

52 % 46 %

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BMW GroupInvestor PresentationSeptember 2009Page 45

BMW Group Financial Services. Residual value development in the USA.

BMW brand

Source: Manheim Used Vehicle Value Index, mix and mileage adjusted

BMW brand vs. all luxury brands

All luxury brands

Page 46: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 46

BMW Group Financial Services. Development of CPO retail in the USA.

60

40

20

0 6.1

80

100

120

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

16.8

28.3

44.7

39.9

60.665.7

71.173.2

80.489.8

104.5in 1,000 units

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BMW GroupInvestor PresentationSeptember 2009Page 47

BMW Group Strategy. Core elements of our corporate strategy.

Financial Strategy

Process management:

Flexibility in production

Component

exchange

Networking

Premium Brand Strategy:

Focus on premium segments in the automobile and

motorcycle market

Strategic Realignment

Sustainability & Efficient Dynamics

Page 48: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 48

BMW Group Global Production Network. Automobile production by plant in 2008.

in 1,000 units

Regensburg, GermanyProduction of BMW 1, 3 Series, Z4 274.0 Leipzig, Germany

Production of BMW 1, 3 Series 150.0

Dingolfing, GermanyProduction of BMW 5, 6, 7 Series 241.3 Rosslyn, South Africa

Production of BMW 3 Series 48.0

Oxford, UKProduction of MINI 235.0 Goodwood, UK

Production of Rolls-Royce 1.4

Munich, GermanyProduction of BMW 3 Series 202.9 Shenyang1, China

Production of BMW 3, 5 Series 33.7

Spartanburg, USAProduction of BMW X5, X6 170.7 Steyr2, Austria

Contract Production of BMW X3 82.9

1

Joint venture2

Contract production

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BMW GroupInvestor PresentationSeptember 2009Page 49

BMW Group Global Production Network. Adjustment of production volume.

Q-on-Q development of production and retail sales.

Q1-08

(vs. Q1-07)Q2-08

(vs. Q2-07)

Q3-08

(vs. Q3-07)Q4-08

(vs. Q4-07)Q1-09

(vs. Q1-08)

Q2-09

(vs. Q2-08)

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BMW GroupInvestor PresentationSeptember 2009Page 50

0

BMW Group Global Production Network. Work time accounts

for high volume flexibility.

Market demand

Volume[units p.a.]

+300 hours

-300 hours

Work time account flexibility

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BMW GroupInvestor PresentationSeptember 2009Page 51

BMW Group Global Production Network. Continuous growth.

-

Product design suitable for production processes

-

Specific investments only for sustainable capacity increases (e.g. Oxford plant)

Cost productivity

=Change in performanceChange in costs (incl. depreciation)

(in %)

Development of cost productivity

-

Strict economic steering of product and production projects

-

Permanent benchmarking process with competitors

Old target until 2006: Improvement of 5% p.a.New target: Improvement of 7-8% p.a.

Page 52: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 52

BMW Group Strategy. Core elements of our corporate strategy.

Financial Strategy

Process management:

Flexibility in production

Component

exchange

Networking

Premium Brand Strategy:

Focus on premium segments in the automobile and

motorcycle market

Strategic Realignment

Sustainability & Efficient Dynamics

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BMW GroupInvestor PresentationSeptember 2009Page 53

The BMW Group’s understanding. Anchoring of the topic in the BMW Group.

For its products Clean Mobility: zero-emissions driving

As an industrial Responsible use of natural resources enterprise

As an active Corporate Citizenship activities corporate citizen

Within the company Basic principles

Executive Board Resolution in 2000: „The BMW Group will continue to pursue sustainable development as principle of corporate strategy.“

„Sustainability throughout the value added chain is inseparable from our corporate self-image. That is why we choose to take responsibility. Because of our convictions, but also our self-interest, now and in the future.“Dr. Norbert Reithofer, Chairman of the Board of Management of the BMW AG, in the Sustainable Value Report 2007/2008

Strategy Number ONE (09/2007). BMW Group assumes responsibility:

Page 54: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 54

The BMW Group’s understanding. Commitments and guidelines.

The BMW Group complies with:-

The Global Compact and its ten principles

-

The Cleaner Production Declaration of the UN Environmental Programme (UNEP)

In addition, the BMW Group is guided by:-

The agreements of the International Labour Organisation (ILO)

-

The OECD guidelines for multinational companies-

The Business Charter for Sustainable Development of the International Chamber of Commerce (ICC)

The BMW Group’s understanding of Corporate Sustainability:

-

For us, corporate sustainability means making a lasting, positive contribution to the economic success of the company. This is the

basis

for exercising ecological and social responsibility.

-

For us, an awareness of our social responsibilities is inseparable from our corporate self-image.

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BMW GroupInvestor PresentationSeptember 2009Page 55

Sustainability actions of the BMW Group are honored externally. BMW Group is the industry leader.Sustainability oriented ratings and financial indices are growing in number and importance. The BMW Group is among the top companies represented in these sustainability indices:

-

Dow Jones Sustainability Indexes/Dow Jones STOXX Sustainability Indexes: Business Leader since 2005. The BMW Group is the only automotive company continuously listed since the establishment of this most important sustainability index in 1999.

-

Listed in FTSE4Good/FTSE4Good Environmental Index-

Listed in Merrill Lynch ML Carbon Leaders Europe Index

-

3rd Place in "DAX 30 Nachhaltigkeitsrating" by Scoris in 2007-

Oekom: Corporate Responsibility Rating Oekom 2006 Status Prime

-

ÖKO-Trend certificate for outstanding corporate responsibility (most points in the automotive industry)

Page 56: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 56

BMW EfficientDynamics. The vision of the BMW Group.

2008 > 2020

today

future

tomorrow

hydrogen / electric

ICE Improvements–

Brake Energy Regeneration–

Active Aerodynamics–

Electric steering–

Electric water pump

Further ICE improvements

Active Hybrid

Clean Diesel

Predictive energy management

Thermoelectric generator

Page 57: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 57

BMW EfficientDynamics. Efficiency increases powertrain.

CO2

free

-

12 %

-

20 %

100 %

-3 to

-

15 %

4 valve,BMW Bi-Vanos

Energy Mgmnt. Hybrid Vehicles

BMW CleanEnergy

BMW VALVETRONIC

BMW High Precision Injection

Intelligent management of energy flows

Page 58: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 58

BMW EfficientDynamics. Tailor-made energy management packages.

Electric water pump Electric steering

Decoupled A/C compressorPressure controlled fuel pump Brake Energy RegenerationAuto Start Stop functionGear shift displayPower Steering

AerodynamicsCooling air flap systemBrake air flap systemTyres with reduced rolling resistanceLight weight contruction

Energy management: ICE improvements: High Precision Injection / Common Rail high pressure fuel injection

Driving Resistance:

Page 59: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 59

14

13

12

11

10

9

8

7

6

5

4

Fue

l con

sum

ptio

n [lt

r/10

0 km

]

5.5 6.5 7.5 8.5 9.5 10.5 11.5

BMW X3 3.0 d

Hybrid #1MINI Cooper D

BMW 118dBMW 120d

HybridBMWEU test cycle

Customer driving profile*

Acceleration 0-100 km/h [s]

BMW EfficientDynamics. Exceeding even today‘s hybrid concepts...

* = measured by at least one German motoring magazine

Hybrid #2

BMW X3 3.0 sd

Page 60: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 60

BMW EfficientDynamics. The product portfolio.

Customer-oriented, sustainable strategy.

High Precision Injectionin lean-burn modeHigh Precision Injectionwith Twin Turbo TechnologyVALVETRONIC TechnologyVariable Twin Turbo Diesel Technology3rd Generation Piezo

Common Rail Diesel TechnologyBrake Energy Regeneration

Auto Start-Stop Function

Active Aerodynamics

Tires with low Rolling Friction

Electric Waterpump

Electric Steering

Shifting point indicator

MINI

BMW EfficientDynamics

measures applied:Some restrictions may apply,

depending on individual car configuration

1 Series 3 Series 5 Series 6 Series 7 Series X3 X5 Z4X6

1.) Direct injection with Twin Scroll Turbo 2.) System comparable to VALVETRONIC

2.)

1.)

Page 61: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 61

BMW EfficientDynamics. MY 2010:

The BMW Group 140 g fleet…

Fuel consumption according to new EU test cycle in l/100km. CO2 emissions in g/km.

32 BMW Group models have a maximum of 140 g CO2

/km.

Page 62: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 62

180

160

140

200

220

240

BMW Group CompetitorsACEA

BMW EfficientDynamics. ACEA voluntary commitment exceeded.

EU fleet emissions(g CO2 /km)

ACEA, 1995 -

2008: approx. -16%

BMW Group, 1995 -

2008: > -

25%

1995 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20081996 1997

156

Page 63: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 63

BMW EfficientDynamics. A competitive advantage not

only at the fuel pump…

EU-Countries with a CO2

based registration or annual tax

14 of the 27 EU member countries already have a CO2

-based registration or annual tax in place.

CO2

based annual tax wasintroduced in Germany at

July 1st, 2009

Page 64: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 64

BMW EfficientDynamics. CO2

emissions of new cars registered in Germany in 2008.

Source: Federal Motor Transport Authority (KBA)

Page 65: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 65

BMW EfficientDynamics. BMW 7 series Active Hybrid.

(1)

High efficient BMW V8 gasoline engine (330kW / 650Nm) with High Precision Injection and TwinPower Turbo.

(2)

Electric motor (15kW / 210Nm).

(3)

8-speed automatic transmission.

(4)

High voltage electronics (120Volts).

(5)

Lithium-Ion battery (120Volts / 800Wh).

Page 66: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 66

BMW EfficientDynamics. BMW X6 Active Hybrid.

(1)

High efficient BMW V8 gasoline engine (300kW / 600Nm) with High Precision Injection and TwinPower Turbo.

(2)

Two-mode ActiveHybrid transmission (2 electric motors max. 67kW / 780Nm each, planetary gearbox, power split, 7 speeds).

(3)

High Voltage Electronics (max. 425Volts).

(4)

High performance Ni-MH battery (312Volts / 2.4kWh).

Page 67: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 67

BMW EfficientDynamics. BMW Group prepares for technical field trials

with electric vehicles.

Number of units:

In total 550 units will be offered in LA, the greater NYC region, Munich, Berlin and London

Power:

150kw

Range:

up to 240km or 150 miles

Basis:

MINI hatch

Start:

December 2008

Lease terms:

850 USD per month, contract ends after 12 month

Target:

to gain detailed knowledge of how mobility can be achieved

efficiently using pure electrically powered vehicles

Page 68: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 68

BMW Efficient Dynamics. Next steps (examples).

Thermoelectric

Generator

Predictive Energy ManagementSolar roof

New turbocharged ICE generations

Page 69: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 69

BMW EfficientDynamics –

Next Steps. Thermoelectric Generator.

Technology transfer from deep space exploration to the automotive industry.

Direct conversion of thermal into electrical energy.

Up to 5% lower fuel consumption.

Ready for series production in~ 5 years.

Application: Power Generationfor Deep Space Exploration

p n

U

Heat Sink(Coolant)

Heat Source(Exhaust)

Thermo-electric Material

Electrode

Page 70: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 70

BMW EfficientDynamics –

Next Steps. Predictive Energy Management.

Predictive Energy ManagementACC

Navigation

Camera

DSC

PDC

DME

Light/Rain Sensor

Merging all available sensor information

Prediction of upcoming situations

Optimized vehicleconditioning

Brake Energy Regeneration

Heat-management

Green Routing / Driver assistence

Aerodynamics

Air conditioning

Auto Start Stop Function

……

Page 71: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 71

BMW Group Strategy. Core elements of our corporate strategy.

Financial Strategy

Process management:

Flexibility in production

Component

exchange

Networking

Premium Brand Strategy:

Focus on premium segments in the automobile and

motorcycle market

Strategic Realignment

Sustainability & Efficient Dynamics

Page 72: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 72

BMW Group Financial Strategy.Value orientation.

Automobiles:

Return on Capital Employed

Vehicle projects:

Model return based on DCF

Vehicle projects:

Model return based on DCF

Finance & lease portfolio:

Cash flows

Motorcycles:

Return on Capital Employed

Financial Services:

Return on Equity

Page 73: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 73

BMW Group Financial Strategy. Effects on Automobiles segment earnings.

2007 2008

EUR million

– 387

– 196– 16

3.450

690

Depreci-

ation &

amorti-

zation

Raw

materials

Currency

Profit before financial result (EBIT)

Volume/

mix/

market

Efficiencyenhance-

ments

-1.446– 153

6.4% 1.4%EBIT margin

Riskprovi-sions

-911

Personnel

reduction

-452

+ 801

Other

changes

Page 74: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 74

BMW Group Financial Strategy. Net interest-bearing assets Automobiles

segment.

in €

Mil.30.06.2009

+ 5,073 + 557

+ 3,501

-4,769

9,046

in €

Mil.31.12.2008

Cash and cashequivalents

Marketablesecurities

Financial

liabilities

Net interest-

bearing assets

Internal net financial

Receivables from

Financial Services

Segment

+4,684

Internal net financial

Receivables from

Other Entities

Segment

Cash and cashequivalents

Marketablesecurities

Financial

liabilities

Net interest-

bearing assets

Internal net financial

Receivables from

Financial Services

Segment

Internal net financial

Receivables from

Other Entities

Segment

+ 7,086 + 562

-3,997

10,041

+2,192+ 4,198

Page 75: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 75

BMW Group Financial Strategy. Operating cash flow and free cash flow.

in million Euro

4,970

6,157 6,184

5,373

6,340 6,246

4,471

124

2,042

956

2,291 2,147

-81

3,717

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2003 2004 2005 2006 2007 2007 2008

Cash inflow from operating activities Free cash flow

Industrial Operations sub-group Automotive Segment

Page 76: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 76

3,226

2,5972,777

2,934 2,865

1,121

1,396

1,536 1,3331,224

9.8%

8.6% 8.8%7.6%

7.9%

0

1,000

2,000

3,000

4,000

5,000

6,000

2004 2005 2006 2007 20080.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Capitalized development costs

Capital expenditure in property, plant equipment and intangible assets

Capital expenditure ratio

BMW Group Financial Strategy. Capital expenditure.

EUR million

4,3473,993 4,267

4,313

4,204

Page 77: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 77

5.3% 5.3% 5.2% 5.2% 5.3%

6.4%6.5%

5.6%5.4%

6.7%39.8%

44.8%42.4% 42.8%

47.9%

1%

2%

3%

4%

5%

6%

7%

8%

2004 2005 2006 2007 20080%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

R&D Costs (IFRS) / Revenues in % R&D Costs (HGB )/ Revenues in % Capitalisation Ratio

BMW Group Financial Strategy. Research & Development costs.

in million Euro 2004 2005 2006 2007 2008

Research & Development Costs (IFRS) 2,334 2,464 2,544 2,920 2,825

Research & Development Costs (HGB) 2,818 3,115 3,208 3,144 2,864

Page 78: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 78

BMW Group Financial Strategy. Spot & equilibrium rate euro / US dollar.

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

Jan 00 Jul 00 Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09

Spot rate Equilibrium rate

Page 79: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 79

BMW Group Financial Strategy. Spot & equilibrium rate euro / GB pound.

0.55

0.60

0.65

0.70

0.75

0.80

0.85

0.90

0.95

Jan 00Jul 00 Jan 01Jul 01 Jan 02Jul 02 Jan 03Jul 03 Jan 04Jul 04 Jan 05Jul 05 Jan 06Jul 06 Jan 07Jul 07 Jan 08Jul 08 Jan 09Jul 09

Spot rate Equilibrium rate

Page 80: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 80

BMW Group Financial Strategy. Spot & equilibrium rate euro / JP yen.

90

100

110

120

130

140

150

160

170

Jan 00 Jul 00 Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09

Spot rate Equilibrium rate

Page 81: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 81

BMW Group Treasury. Global funding objectives.

The different objectives are interdependent and of equal importance.

Value Orientation

Financial Flexibility

Financial Independence

Ensure sustainable

access

to international financial markets.Explore and maintain presence

and competence

in all strategicimportant capital markets worldwide.

Ensure independence

from individual lenders, banks and financialInstruments.Diversification

of funding sources, investors and products.

Create value by optimizing financing costs on overall Group basis.Credit spread

management for each

financial instrument.Ensure long-term, strategic

perspective (instrument mix).

Page 82: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 82

BMW Group Treasury. Corporate finance capabilities.

Categories of available instruments over the spectrum of maturities:

CP

ABCP

<1yr 1yr 2yrs 3yrs 4yrs 5yrs 7yrs 10yrs+

(EMTN) PPs

ABS -

Term

Bonds

Retail Institutional

Bank Loans

CP

Attractive and flexible short-

term funding.

Deposits:

Diversification of funding instruments and investors

(EMTN) Private Placements

Attractive funding source.

Effective management of spreads provides support for the short end of the BMW Credit Curve.

ABS

ABS supports investor diversification.

Bank Loans

Local source of funding, mainly where access to capital markets is limited.

Retail

Diversification of investor base.

Limited potential of opportunistic access.

Institutional

Highest liquidity and depth of the market, i.e. highest funding potential.

Typical for Benchmark bonds.

Creation of a BMW Credit Spread Curve.

Customer Deposits / Brokered CDs

Page 83: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 83

BMW Group Treasury. Issuing programs.

EUR 30bn EMTN-Program

EUR 5bn ECP-Program EUR 2bn FCP-Program

USD 7bn USCP-Program

BMW AG

BMW US Capital, LLCBMW Finance N.V.

BMW Australia Finance LimitedBMW (UK) Capital plc BMW Japan Finance Corp.

BMW AGBMW Finance N.V.BMW Coordination Center V.O.F.BMW (UK) Capital plcBMW Malta Finance Ltd

BMW Finance N.V.

BMW US Capital, LLC

EMTN Program as main mid-

to long-term refinancing program. Three Commercial Paper Programs to cover short-term liquidity needs.

Page 84: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 84

BMW Group Treasury. Broad investor base.

USA

USD Extendible Notes USD Commercial Paper

USD US PP

USD ABS

Euro Capital Markets

EUR Commercial Paper

French Commercial Paper

EUR (EMTN) PPs

EUR Benchmark Bonds

EUR Retail Bonds

USD Eurodollar

AUD Euroaussie

JPY Euroyen

EUR ABS

Great Britain

GBP Commercial Paper

GBP (EMTN) PPs

GBP Bonds

GBP ABS

Switzerland

CHF (EMTN) PPs

CHF Bonds

Japan

JPY (EMTN) PPs

JPY Insurance PPs

Offshore US

USD (EMTN) PPs

Australia

AUD (EMTM) PP

AUD ABS

Singapore

SGD (EMTN) PP

South Africa

ZAR ABS

Canada

CAD ABS

CAD (EMTN) PPs

Mexico

MXN (EMTN) PP

Funding is done worldwide to optimize refinancing costs and to establish a

broad investor base.

Page 85: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 85

BMW Group Treasury. Development of BMW Group liquidity.

The BMW Group was able to substantially increase its liquidity position during the course of 2008 and in H1 2009.

EUR billion

5.44.8 4.9

8.2

10.1

11.9

Page 86: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 86

BMW Group Treasury. Development of BMW 5-year CDS.

Source: Reuters Credit Views

bps

Page 87: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 87

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

BMW Group Treasury. Bonds, private placements and Schuldscheindarlehen maturities.

Issuance as of August 31, 2009, covers all maturities from bonds, PPs and SSD in 2009. Excess amounts are used among other things to reduce financial liabilities from

other instruments (such as bank lines).

Maturities based on nominal values excluding derivatives.

Issuance ytd

EUR million

Page 88: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 88

BMW Group Capital Market Financing. BMW Group CP outstandings.

Total in USD Backup Line

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Q2

05

Q3

05

Q4

05

Q1

06

Q2

06

Q3

06

Q4

06

Q1

07

Q2

07

Q3

07

Q4

07

Q1

08

Q2

08

Q3

08

Q4

08

Q1

09

USD million

Q2

09

Page 89: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 89

BMW Group Treasury. ABS Volumes 1997-

2009 ytd.

BMW Group has actively used asset-backed funding over the last 12 years.

# of dealsVolume in EUR million

0

2

4

6

8

10

12

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

USA GB Japan Australia South Africa Germany Canada # Deals

Page 90: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 90

BMW Group Treasury. Regional Focus of ABS activities.

US and Europe are strategic ABS Markets for the BMW Group.

USA:

BMW Group is an established participant in the US ABS market

Over USD 20bn of loan, lease and wholesale assets securitized over the last 10 years

ABCP and ABS term financing used

Europe:

BMW Group executed its first public ABS transaction in Europe in 2007 (€800m German lease ABS)

Besides, ABCP funding is used in the UK and Germany.

BMW Group aims to establish itself as a regular and respected player in the European ABS market.

RoW:

BMW Group uses ABS funding very actively in Australia, Canada, Japan and South Africa

Mainly used as local and “opportunistic”

funding alternative

Page 91: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 91

BMW Group Treasury. Financial debt as of June 30, 2009.

BMW Group maintained a well-diversified debt structure even in difficult markets.

The average maturity of financial liabilities is approximately 2 years.

*Adjusted, excluding currency and interest rate derivatives.

Bank Loans

Commercial Paper

ABS

Others 2%

Customer Deposits

Bonds /

PP /

BrokeredCDs

EUR 60.7bn*.

7%15%

44%

12%

8%

Schuldschein-

darlehen

12%

≤1 year

55%45%

Debt Maturity

> 1 year

Page 92: Bmw investor presentation

BMW GroupInvestor PresentationSeptember 2009Page 92

BMW Group Treasury. Recent funding activity.

ABSLease TALF Deal, USD 2bn, settlement 9 June 2009Loan Conduit Deal, JPY 25bn, settlement 4 May 2009Loan Conduit Deal, AUD 350mn, settlement 7 July 2009

Bonds

EUR benchmark bond EUR 1.5bn, maturity 3.5 years, settlement 23 Jan. 2009EUR benchmark bond EUR 500mn, maturity 5 years, settlement 13 Feb. 2009 (tap of EUR 750mn benchmark, settlement 19 Nov. 2008)EUR benchmark bond EUR 1.25bn, maturity 3 years, settlement 2 March 2009Eurodollar USD 400mn, maturity 2.5 years, settlement 22 June 2009

Private Placements

Over EUR 3.0bn 2009 ytd.Constant issuance in different currencies(EUR, JPY, SEK, USD)

Commercial Paper

Up to USD 8bnUSD 6.2bn outstanding as of August 31, 2009

Certificate of Indebtedness (Schuldschein)

EUR 2bn, private transaction, maturity 2 years, settlement 15 Dec. 2008EUR 145mn 2009 ytd.