1 SLIDE:

BMW was founded by Karl Friedrich Rapp in October 1913, originally as an aircraft manufacturer,
Bayerische Flugzeug-Werke. The Milbertshofen district of Munich location was chosen because it
was close to the Gustav Otto’s Flugmaschinenfabrik site, a German aircraft manufacturer.

The blue-and-white circular logo BMW still used nowadays alludes to the blue and white checkered
flag of Bavaria and also indicates, above all, a spinning propeller on a blue sky background.

In 1923 BMW built their first motorcycle model the R32 – that had a 500cc air-cooled horizontally-
opposed engine.

It was the year of 1927 when the first car was introduced: the Dixi DA 1 (engine: 4 cylinder, power:
15 HP, top speed: 75 km/h) the production of which was ceased in 1932.

2 SLIDE (WWII):

The BMW operations suffered from severe bombing towards the end of WWII. Moreover, the
eastern Germany sites (Eisenach, Dürrerhof, Basdorf and Zühlsdorf) were seized by the Soviets. The
Munich factory was largely destroyed.

3 SLIDE (WWII)

The BMW operations suffered from severe bombing towards the end of WWII.

Moreover, the eastern Germany sites (Eisenach, Dürrerhof, Basdorf and Zühlsdorf) were seized by
the Soviets.

4 SLIDE (POST-WWII):

After the war the Munich factory took some time to restart production in any volume.

BMW was banned from manufacturing for three years by the Allies and did not produce a car model
until 1951 – the BMW 501.

5 SLIDE (PRODUCTION OUTSIDE GERMANY)

BMW announced their plans to build the first factory outside of Germany in June of 1992.
Construction on the plant began in 1993 and the first vehicle rolled off the line in September 1994.
Since then, BMW has produced 5 different vehicles and their variants, the BMW 318i, the Z3 and Z4
roadsters, the BMW X5 Sports Activity Vehicle and the X6 Sports Activity Coupe.
(BMW's South Carolina factory supports 23,050 jobs and generates $1.2 billion in wages and
salaries annually within the state).
BMW in Spartanburg, SC currently employs 5,000 people including contractors and produces 500-
600 vehicles per day.
As BMW Manufacturing looks to the future, the plant in Spartanburg will begin production of the
BMW ActiveHybrid X6, BMW's first hybrid vehicle, later this year and finalization of the $750
million expansion to build the next generation BMW X3 is well underway.

The Rosslyn plant, South Africa, manufactures cars of which 70 percent destined for export.
Approximately 50,000 3 Series cars a year are exported to the USA, Japan, Australia, and the Middle
East. South African–built BMWs are now exported to right hand drive markets including Japan,
Australia, New Zealand, the United Kingdom, Singapore, and Hong Kong, as well as Sub-Saharan
Africa. Since 1997, BMW South Africa has produced vehicles in left hand drive for export to Taiwan,
the United States and Iran, as well as South America.

Starting from October 2003, BMWs are also produced in Shenyang, China, by the company’s joint
venture with the Chinese manufacturer Brilliance to build 3 Series and 5 Series vehicles destined for
the local market.

8 SLIDE (BMW Info.)

Bayerische Motoren Werke AG (BMW) is a German based manufacturer of luxurious automobiles,

motorcycles and engines. The company also owns the MINI brand by Rover Cars Limited, and is the
parent company of Rolls Royce Motors.

Its global market share revolves around the percentage of 6.34% (2008). However, on the European
Market, in particular in the Western European countries, BMW’s market share fell from 5.1% in
2008 to 4.5% in 2009 in contrast to an increase from 4.8% in 2007.

Revenue – £3.468 billion, down by £0.7 billion from 2007.

Target market – Middle to Upper class individuals and families, plus business users.

9 SLIDE

The BMW Group operates in more than 150 countries with a 100,041 people workforce (2008) all
co-ordinated from the corporation’s headquarters in Munich. BMW Group currently maintains 17
production sites in six main countries namely: United Kingdom, United States (BMW Manufacturing
Co. Spartanburg), China, Austria, South Africa and Germany.

Key people: Norbert Reithofer (CEO and Chairman of Board of Management), Joachim Milberg
(Chairman of Supervisory Board), Stefan Krause (Chief Financial Officer)

10 SLIDE

Number of shares: 602,464,000. The Quandt family holds approximately 46% of the shares of the
company, as follows: 15.53% Hanna Quandt, 15.25% Stefan Quandt, 11.62% Susanne Klatten, the
remaining shares being divided between employees (2.1%), GFA Gesselschaft für Automobilwerke
mbH (10.16%) and the rest is free flow (45.34%)
11 & 12 SLIDE

POLITICAL: Cars 21 Regulation – aim: to strengthen competitiveness and employment; Regulation

(EC) No 443/2009: CO2 emissions reductions – Emissions target of 120 g/km CO2 by 2012; The ELV
Directive; Government funding available on request;

ECONOMIC: Scrappage schemes, e.g., cars 10 years or older in UK; Registrations rise by 24%
(October 09); Recession: 4.3% less sales 2008/2007); Hardening of Euro affecting USD/GBP markets;
Cost of Oil to go up, could affect consumer buying.

SOCIAL: Collapse in the 4x4 market; “Emotional brands” customers’ responsiveness favours BMW;
“Green” tendency: ActiveHybrid X6, hybrid 7-Series; Estimated UK population of 70 million by
2029; Population shift to an increasing older generation; People have a more active lifestyle, related
to improved life expectancy.

TECHNOLOGICAL: Constantly changing environment, BMW EfficientDynamics Technology try to stay

one step ahead of its competition (BMW iDrive).

LEGAL: Health and safety, Euro NCAP safety test on all cars; Road tax brackets; Insurance groups.

ENVIRONMENTAL/GREEN: Lack of natural resources, hence move to hybrid cars; Global shift to cut
CO2 emissions, Kyoto agreement; Greener lifestyle tendency.

13 SLIDE

As mentioned within the earlier generic presentation of this factor, the European motor
manufacturers’ activities and processes are thoroughly affected by the policies of the EU enacted by
the European Union institutions.

The automotive industry is one of the most regulated sectors in the EU due to its highly complex
products and the many issues that must be considered relating to vehicle use.

The CARS 21 Regulation as well as the new CO2 emissions reduction legislation provides adequate
time for firms, such as BMW AG, to modify their car models in view of the new legal framework.

With reference to the environmental goals set out in CARS 21, and to the pregnant global tendency
towards decreasing the pollution levels, a novel piece of EU legislation is declaring the new emission
performance standards for new passenger cars. This comes under the ambit of Regulation (EC) No
443/2009.

This Regulation seeks to reduce the average CO2 emissions of passenger cars from the current level
of approximately 160 g CO2/km to 120 g CO2/km by 2012.

Therefore, BMW has launched a 24 model passenger car fleet that meets the standards.
14 SLIDE

Notwithstanding the Regulations put forward by the EU, Directives have also triggered major
reactions from BMW. The end-of-life vehicles Directive (ELV Directive) establishes as prime
objectives the reuse, recycling and recovery of vehicles and components.

BMW managed even to foresee the enactment of such legislative measures and thus it was the first
company to establish a Recycling Development Centre (RDC) – the motor industry’s only
manufacturer-operated recycling and dismantling centre where they optimistically strive towards
attaining the ELV Directive requirement whereby 95% of vehicles ought to be reused and recycled
starting with 2015 (Kimberley 2004). With regards to present minimum requirements which are 80%
for reuse and recycling and 85% for reuse and recovery, BMW results meet the standards.

15 SLIDE (ECONOMIC).

One of the most dramatic effects of the recession was that car production fell 7%, from 17.1 to
15.9million units.
BMW delivered 1,435,876 units worldwide in 2008, down 4.3% compared with 2007 figures.

Another effect of the meltdown was that in 2008, 18.4 million cars were produced in Europe, 7% less
than the 19.7 million produced in 2007,with Italy reporting the worst decline (-20.3%).

BMW believes the Euro may harden more against the USD and GBP, bringing about harms in two key
markets, with counteracting price augmentations difficult to push through – although the launch of
latest prototypes will help. That makes the recent run-up in its shares to almost €36, or 22 times
2010 earnings, premature. After 6% drop to €31.50, the price more fairly reflects the outlook.

As forthcoming plans, BMW prioritises expansion, placing focus on cost-efficiency, profitability, and
merchandise extension. In line with a boost in worldwide sales the carmaker is eyeing figures of
over 1.8million units by 2012 and is aiming a comeback of up to 10% on trade by 2012. It will seek to
roll sales of over 2million units by 2020