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Annual Report 2018
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Strategic Statements
How does the BMW Group contribute to sustainable mobility? How is the company coping with volatility in global markets? Chairman of the Board of Management Harald Krüger and Board Member for Finance Nicolas Peter address the main strategic challenges and how the BMW Group is using them to its advantage.
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Harald Krüger
Harald Krüger
Chairman of the Board of Management of BMW AG
Strategic
Statements
To win the future, you first have to invent it. And that is exactly what we are doing – putting future technologies on the roads today in the new BMW 3Series. At the same time, at our Autonomous Driving Campus we are not just rethinking mobility, but also the way we work. Then there’s the BMW Vision iNEXT: The series-production model for release in #2021 represents the automotive future, as reimagined by us time and again for our customers.
bmw3er-start
Harald Krüger
Chairman of the Board of Management of BMW AG
bmw3er-start
Dr. Nicolas Peter
Board Member for Finance of BMW AG
2021
New thinking. New ways of working. New technologies and new models: We are reinventing individual mobility at every level.
Harald Krüger
Harald Krüger
Chairman of the Board of Management of BMW AG
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Future mobility will be all about #autonomous­driving. When is the first autonomous BMW coming?
#Sustainable­Mobility is a key issue, especially in cities. What can the automotive industry contribute?
The #electrification of vehicles is increasingly important, particularly in cities. What exactly is the BMW Group doing to tackle the transition to electromobility?
#Electromobility, #autonomous­driving, #car-sharing services – the automotive industry is in constant flux. What is the BMW Group doing in real terms?
Dr. Nicolas Peter
Dr. Nicolas Peter
Board Member for Finance of BMW AG
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Volatile markets are making business difficult and distracting attention from #futuremobility. What’s the BMW Group’s response?
The automobile industry faces various challenges. Nevertheless, the #BMWGroup has been reliably highly profitable in the last eight years. What does the future hold in this regard?
What are you expecting in #2019?
Activate your sound system, please
Future mobility will be all about #autonomous­driving. When is the first autonomous BMW coming?
#Sustainable­Mobility is a key issue, especially in cities. What can the automotive industry contribute?
The #electrification of vehicles is increasingly important, particularly in cities. What exactly is the BMW Group doing to tackle the transition to electromobility?
#Electromobility, #autonomous­driving, #car-sharing services – the automotive industry is in constant flux. What is the BMW Group doing in real terms?
Activate your sound system, please
Volatile markets are making business difficult and distracting attention from #futuremobility. What’s the BMW Group’s response?
The automobile industry faces various challenges. Nevertheless, the #BMWGroup has been reliably highly profitable in the last eight years. What does the future hold in this regard?
What are you expecting in #2019?

We are already on the verge of delivering highly automated driving today – Level 3 automation out of a possible 5. And in 2021 the BMW iNEXT will make highly automated driving a reality. The iNEXT will offer an electric range of 700 kilometers together with true BMW performance. It will be our technology flagship for electro-mobility, connectivity, highly automated driving and services. When it comes to our customers’ well-being, there’s only one thing that truly matters: Safety First. To remain appealing to customers, autonomous driving must be secure and safe. That’s our definition of premium.

At the BMW Group, we offer solutions. For example, we have reduced CO2 emissions from our new vehicles by 42 percent since 1995. To tackle congestion and reduce the traffic on city roads, our response is car-sharing and other attractive mobility services. In 2018 we delivered over 140,000 electrified vehicles to customers. By the end of this year, there will be 500,000 electrified BMW Group vehicles out on roads around the world. This underscores our clear drive towards creating future mobility. At the same time, we need to work together with business, politics and civic society to deliver additional fast and efficient solutions.

We continue to work towards the future, as we have for years, setting the course today for the developments of tomorrow. Our customers expect premium standards from us, be it in conventionally or electrically powered cars. That is why we are electrifying all of our model series and brands: 2019 will see the launch of the all-electric MINI, and 2020 the BMW iX3. The next benchmarks will come in 2021, with the BMW i4 and BMW iNEXT. By 2025 our product range will comprise 25 electrified models, 12 of them all-electric.

Let me give you four examples.

The first is autonomous driving. We have 1,300 employees working just in this area alone, at our Autonomous Driving Campus.

The second is the increasing connectivity of our vehicles. In this area we developed our Intelligent Personal Assistant. This helps navigate, finds parking spaces and explains vehicle functions.

Third: Mobility Services. Together with Daimler we offer, for example, car-sharing, ride-hailing, parking and charging solutions under our Now services – all on demand, and all from a single provider.

The fourth is the fact that we are reorganising the way we work in-house. We are moving into new territory, entering the realms of #NewWork. We are getting faster, more agile, more innovative and more sustainable.

We have to manage both. We plan to achieve sustainably high profitability in our core business while maintaining a firm focus on the future. In 2018 we invested almost €7 billion in research and development – more than ever before. We are using the investments to redefine mobility. The goals we set ourselves are ambitious. And our shareholders can depend on that. We intend to continue the successful development of the BMW Group, even in a volatile business environment overshadowed by uncertainty.

We remain committed to achieving our target corridor for the EBIT margin of between eight and ten percent in our core business. All our efforts moving forward are designed to meet this target. We plan to reach this target again when the political and economic conditions are more stable. And we are taking concrete countermeasures. Early on, we initiated our corporate program, Performance NEXT. The aim is to compensate against increasing costs including those due to tightened regulations. We will continue to go the BMW way, make clear decisions, break away from old conventions, when necessary, and make the company more flexible.

The BMW Group has a number of highlights for 2019. Our new plant in Mexico will begin production and we are launching our PHEV offensive. By the end of the year, we will have 12 electrified models in our portfolio, my personal favourite being the new 3 Series. The 3 Series sets new standards in design and connectivity. These milestones alone are a reflection of our success. But with success comes responsibility. That’s why we continue to focus firmly on growth and profitability – even in challenging times such as these we are currently experiencing. We do all we can to deliver on our promises.

The five levels of autonomous driving
00
Hands on
the wheel
01
Hands on
the wheel
02
Hands and
eyes temporarily
off
Technological
quantum
leap
03
Hands off,
eyes off
Technological
Moonshot
04
Hands off,
mind off
05
Passenger