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BMW GROUP IN CHINADR. CHRISTOPH STARKPRESIDENT & CEO, BMW GROUP REGION CHINA MAY 2011
BMW Group in China Page 2
INVESTOR PRESENTATION. AGENDA.
Looking back: Strong Economic Growth in China.
The BMW Group Model.
A Promising Future.
BMW Group in China Page 3
OVERVIEW CHINA MACRO ECONOMY. CHINA HAS BEEN ENJOYING STRONG GROWTH OVER THE PAST 20 YEARS.
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
5
10
15
20
25
30
35
40
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
GDP GDP Growth
(Ø ~20 years = 10.4%)
GDP: trillion RMB GDP growthChina GDP Growth (1992-2010)
BMW Group in China Page 4
OVERVIEW CHINA MACRO ECONOMY.CHINA RESPONDED TO THE CRISIS WITH BIG STIMULUS PACKAGES FINANCED BY THE TRADE SURPLUS.
13.0%
10.6%10.1%
9.0%
6.8%6.1%
7.9%8.9%
10.7%
11.9%
10.3%9.6% 9.8%
-10%
-5%
0%
5%
10%
15%
2007 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
China Germany US Japan
China took measures
against the financial crisis
China took measures
against overheating
2008 2009 2010
Major economy GDP growth
BMW Group in China Page 5
AUTO MARKET DEVELOPMENT. TOTAL PV MARKET HAS BEEN DEVELOPING QUICKLY WITH AN EVEN FASTER PLUS SEGMENT GROWTH.
111
167
246
306
417
707
21%
50%47%
24%
36%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
100
200
300
400
500
600
700
800
2005 2006 2007 2008 2009 2010
Plus Segment (Incl. MINI) Growth rate
‘000 Units Plus segment growth 2005-2010
CAGR: +45%
Source: Sales data
BMW Group in China Page 6
BMW GROUP RETAIL DEVELOPMENT.SUCCESSFUL DEVELOPMENT FOR BMW & MINI. BOTH BRANDS GREW FASTER THAN THE PREMIUM MARKET.
15,78824,025
36,357
51,58865,822
90,536
168,998
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2004 2005 2006 2007 2008 2009 2010
BMW Group sales developmentUnits
Source: Sales data
BMW Group in China Page 7
BMW GROUP RETAIL DEVELOPMENT. CHINA HAS BECOME BMW GROUP’S THIRD-LARGEST MARKET AND THE LARGEST MARKET FOR KEY MODELS.
3
2008
5
2010 2004
…
11
1
?
MarketModel
7 Series
X6
5 Series sedan
5er GT
X5
X3
Largest
Largest
Largest
Largest
2nd-largest
2nd-largest
BMW Group in China Page 8
2011 YTD MARKET STATUS.BMW GROUP WAS OUT-GROWING A FAST GROWING PLUS SEGMENT IN THE BEGINNING OF 2011.
207,358
294,191
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2010 YTD Apr 2011 YTD Apr
46,619
79,306
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2010 YTD Apr 2011 YTD Apr
+70%
Segment share 22.5% 27.0%
+42%
Plus Segment Development BMW+MINI Development
Source: Sales data
BMW Group in China Page 9
INVESTOR PRESENTATION. AGENDA.
Looking back: Strong Economic Growth in China.
The BMW Group Model.
A Promising Future.
BMW Group in China Page 10
OUR SUCCESS FACTORS. HOW DID WE MAKE IT?
BRAND BUILDING
PARTNERS PEOPLE
PRODUCTS
CUSTOMER ORIENTATION& LOCALIZATION
BMW Group in China Page 11
OUR BRANDS: THE MOST CHERISHED TREASURE.WE MAKE EVERY EFFORT TO STRENGTHEN OUR POSITION AS THE MOST SUCCESSFUL PREMIUM BRAND.
BMW Group in China Page 12
OUR BRANDS: BMW.BMW IS THE LEADING BRAND IN THE AMS CHINA BEST CARS 2011 SURVEY (18,000 PARTICIPANTS).
13 Criteria1. Well Made
2. Very Reliable Car
3. High Safety Standards
4. Advanced Technology
5. Environmentally Friendly Cars
6. Good Customer Service
7. Good Value For Money
8. High Re-sale Value
9. Good Looks/styling
10. Makes Sporty Cars
11. Successful In Racing
12. Has Good Advertising
13. Overall, I Like This Brand
Rank of category 13: Overall, I like this brand
BMW is NO.1 in 4 main categories out of 13.
68.5
66.1
59.1
54.4
51.2
28.1
21.5
18.5
17.3
16.3
Source: AMS China
BMW Group in China Page 13
JOY IS BMW.THE JOY SPIRIT HAS BEEN SUCCESSFULLYTRANSLATED INTO CHINESE LANGUAGE AND CULTURE.
JOY
BMW Group in China Page 14
BRAND CAMPAIGN IN 2010.THE CHINESE MEDIA HIGHLY APPRECIATED THE JOY CAMPAIGN.
The introduction of this concept has gained BMW an upper
hand in branding over competitors.
The use of Chinese cultural elements and wisdom helped
portray an international face of a top brand.
The JOY campaign has elevated the substance of BMW
brand and also fulfilled in-depth communication with
Chinese customers with tribute to Chinese culture.
BMW Group in China Page 15
MULTI-TIER PRODUCT LINE.MOST BMW GROUP PRODUCTS ARE ALREADY OFFERED IN CHINA TO MEET THE HUGE LOCAL DEMAND.
Local
Production
BMW Group in China Page 16
MULTI-TIER PRODUCT LINE.LOCALIZED PRODUCTS GENERATE ADDITIONAL OPPORTUNITIES.
All new BMW 5 Series LWB (locally produced)
7 Series LWB China 60 Years Edition (imported)
BMW Group in China Page 17
MULTI-TIER PRODUCT LINE.ALSO WORLDWIDE SPECIAL EDITIONS ARE WELL PERCEIVED IN CHINA.
7 Series Steinway & Sons Limited Edition
M3 Tiger Edition: All cars sold out even before official launch!
BMW Group in China Page 18
COMMITTED PARTNERS.FAST DEVELOPMENT OF DEALER NETWORK NOT ONLY IN QUANTITY BUT ALSO IN TERMS OF QUALITY.
45
150
210
0
50
100
150
200
250
2005 2009 2010
BMW Dealer Network Development
562
763
1,057
0
400
800
1200
2005 2009 2010
Sales per dealership (units)8
8.4 8.4
8.3 8.3
8.7
7.6
7.8
8
8.2
8.4
8.6
8.8
2008 2009 2010
BMW customer satisfaction
Sales Aftersales
Source: BMW internal analysis
+40%
+39%
BMW Group in China Page 19
INVESTMENT IN PEOPLE. DEALER NETWORK TRAINING. INVEST IN OUR PEOPLE ALSO IN THE STAFF OF DEALER-SHIP TO ACHIEVE HIGHER CUSTOMER SATISFACTION.
>40,000
>90,000
~250,000
0
100,000
200,000
2009 2010 2015
BMW Shanghai Training Center
Dealer Training Man Days Development (unit: man days)
BMW Group in China Page 20
CUSTOMER ORIENTATION.BMW GROUP IS FULLY DEDICATED TO CUSTOMER SATISFACTION.
BMW Group in China Page 21
INVESTOR PRESENTATION. AGENDA.
Looking back: Strong Economic Growth in China.
The BMW Group Model.
A Promising Future.
BMW Group in China Page 22
CHINA’S ECONOMIC DEVELOPMENT. THE 12TH FIVE-YEAR PLAN (2011 – 2015) AIMS AT A MORE MODERATE GROWTH PATH.
1990 2000 20152010
(Ø GDP growth = 10.4%) (Ø GDP growth (Target) = 7%)
Economic growth
from export/
investment driven to
consumption driven
Income
redistribution and
improving people’s
living hood
Urbanization and
regional
development
Energy saving and
environment
protection
BMW Group in China Page 23
GDP DEVELOPMENT DRIVERS. URBANIZATION AND GROWING MIDDLE CLASS WILL GENERATE TREMENDOUS DEMAND FOR MOBILITY.
Urbanization ratio
Low class Middle class Upper class
Income distribution
Source: State Information Center, McKinsey research
18%26%
36%
47%
60%
-20%
0%
20%
40%
60%
1978 1990 2000 2009 2020 F
BMW Group in China Page 24
ENORMOUS AND EVER GROWING CUSTOMER BASE. TIER 3-5 CITIES PROVIDE HUGE POTENTIAL FOR PLUS SEGMENT.
Chi
na w
ill g
row
and
up
date
Different tier market status*
2010 PV sales per '000 people (unit)
Tier 1
Tier 2
Tier 3
Tier 4/5
Population (mio) GDP (trillion RMB)
42.5
143.9
149.4
972.4
5.6
8.4
6.7
19.2
4.6
13.3
18.5
40.0
* According to the macro-economic and auto industry developing status, all the cities are divided to 5 tiers; population and GDP data as 2009; auto industry data as 2010
BMW Group in China Page 25
GROWING PURCHASING POWER. DRIVEN BY THE OVERALL ECONOMIC DEVELOPMENT, THE NUMBER OF HIGH INCOME HOUSEHOLDS WILL CONTINUE TO GROW FAST.
37.67
11.89
2.011.310.88
CAGR: 34%
2020F2015F201020092008
Number of households with annual income
>250,000 RMB
(Units: million)
Source: State Information Center
BMW Group in China Page 26
BEIJING REGISTRATION LIMIT POLICY. THE POLICY IMPACTS THE TOTAL MARKET, BUT ALSO BRINGS OPPORTUNITIES TO BMW AND PLUS SEGMENT.
-63%
2011 YTD Mar
55,553
2010 YTD Mar
149,278• Beijing PC market decreased by 63% YTD
March. Pull forward effects to be considered.
• BMW has a strong track record in confined
market s, e.g. No.1 in Premium segment in
Hong Kong in 2010 (Share of 15.8% in total HK PV
market for BMW and MINI together, ranked 2nd).
• However, Plus segment’s penetration ratio in
Beijing doubled
• Moreover, BMW’s segment share in Beijing was
further improved
20.9%
2010 YTD Mar
10.4%
2011 YTD Mar
2010 YTD Mar
17.9%
2011 YTD Mar
24.4%
Penetration ratio
BMW’s segment share
2010
15.8%13.4%
2009
BMW+MINI share
in total HK PV market
2,770 units 2,831 units
BMW Group in China Page 27
CONTINUE WITH OUR SUCCESSFUL STRATEGY … … AND FINE-TUNE IT.
BRAND BUILDING
PARTNERS PEOPLE
PRODUCTS
CUSTOMER ORIENTATION& LOCALIZATION
BMW Group in China Page 28
SUSTAINABILITY THROUGH E-MOBILITY.BMW 5 SERIES LWB PHEV CONCEPT CAR WAS INTRODUCED IN SHANGHAI, “FROM CHINA, FOR CHINA”.
BMW Group in China Page 29
SUSTAINABILITY THROUGH QUALITY. AFTER SALES SERVICE CAMPAIGN.
The 1st service branding campaign in China.
BMW Group in China Page 30
SUSTAINABILITY THROUGH QUALITY. CUSTOMER EXPERIENCE AT THE DEALERSHIP.
Top standards for
retail facilities
Efficient
workshop
Customer-
orientated
facilities
BMW Group in China Page 31
SUSTAINABILITY THROUGH PARTNER INTEGRATION. THE 5S DEALERSHIP CONCEPT AIMS AT SUSTAINABILITY AT THE DEALERSHIP LEVEL.
1: Sales
2: Service
3: Spare parts
4: Survey
5: Sustainability
S2S3
S1
S4
S5
BMW Group in China Page 32
SUSTAINABILITY THROUGH LOCALIZATION. CHINESE PEOPLE ASSOCIATE BMW WITH THE OLYMPIC SPIRIT IN THEIR MINDS AND HEARTS.
Product special edition
Hospitality Plan
COD Group Endorsement
Young talent program
Olympic sports support
Customer experience
BMW Group In China Page 33
SUSTAINABILITY THROUGH LOCALIZATION. OFFICIAL PARTNERSHIP WITH EXPO CHINA PAVILION.
BMW Group In China Page 34
SUSTAINABILITY THROUGH LOCALIZATION. THE BMW BRILLIANCE PLANT PHASE II SHOWS OUR OVER- PROPORTIONAL PARTICIPATION IN THE MARKET.
BMW Group In China Page 34
Logistics
High Voltage
Switch Gear
Site Office
Energy CenterVisitor Center Main Office BuildingPaint Shop
Supplier Workshop
Press Shop Body Shop
Assembly
BMW Group in China Page 35
SUSTAINABILITY THROUGH CSR. BMW TAKES RESPONSIBILITY THROUGH THE BMW WARM HEARTS FUND.
Page 36
BOTTOM LINE.BMW GROUP IS LOOKING FORWARD TO A PROMISING FUTURE.
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