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COMPANY PROFILE

Bayerische Motoren
Werke AG (BMW
Group)

REFERENCE CODE: 6A41C0F5-51FC-4B71-AF83-0B9F412CB891

PUBLICATION DATE: 12 Aug 2016
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Bayerische Motoren Werke AG (BMW Group)

TABLE OF CONTENTS

TABLE OF CONTENTS
Company Overview ........................................................................................................3
Key Facts ......................................................................................................................... 3
Business Description .....................................................................................................4
History ............................................................................................................................. 6
Key Employees .............................................................................................................10
Key Employee Biographies .........................................................................................12
Major Products & Services ..........................................................................................19
Revenue Analysis .........................................................................................................21
SWOT Analysis .............................................................................................................23
Top Competitors ...........................................................................................................28
Company View ..............................................................................................................29
Locations And Subsidiaries ........................................................................................39

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Bayerische Motoren Werke AG (BMW Group)

Company Overview

Company Overview

COMPANY OVERVIEW
Bayerische Motoren Werke Aktiengesellschaft (BMW or 'the company') is one of the leading
manufacturers of premium cars and motorcycles. It also offers insurance, car leasing, and financing
services. The company primarily operates in Europe, the Americas, and Asia. It is headquartered in
Munich, Germany and employed 122,244 people as on December 31, 2015.

The company recorded revenues of E92,175 million ($102,319.8 million) during the financial year ended
December 2015 (FY2015), an increase of 14.6% over FY2014. The operating profit of the company was
E9,593 million ($10,648.8 million) in FY2015, an increase of 5.2% over FY2014. The net profit of the
company was E6,369 million ($7,070 million) in FY2015, an increase of 9.8% over FY2014.
Key Facts

KEY FACTS
Head Office

Bayerische Motoren Werke AG (BMW Group)

Petuelring 130
80788 Munich
DEU

Phone

49 89 382 0

Fax
Web Address

https://www.bmwgroup.com/en

Revenue / turnover (EUR Mn)

92,175.0

Revenue (USD Mn)

102,319.8

Financial Year End

December

Employees

122,244

Frankfurt Stock Exchange Ticker BMW

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Bayerische Motoren Werke AG (BMW Group)

Business Description

Business Description

BUSINESS DESCRIPTION
Bayerische Motoren Werke Aktiengesellschaft (BMW or 'the company') is the parent company of the
BMW Group, which is engaged in the development, manufacture, and sale of engines as well as of all
vehicles equipped with those engines, including automobiles and motorcycles. The company also
provides financial services. It sells vehicles under three premium brands: BMW, MINI, and Rolls-Royce.
BMW operates globally with major presence in China, the US, and Germany.

During FY2015, the company operated 30 production and assembly facilities in 14 countries. BMW car
sales network comprises some 3,310 BMW, 1,550 MINI, and 140 Rolls-Royce dealerships worldwide.

BMW operates through four business segments: automobiles, financial services, motorcycles, and others.

The automobiles segment develops, manufactures, assembles, and sells cars and off-road vehicles. It
also sells automotive spare parts and accessories. In Germany, BMW and MINI brand products are sold
through company owned outlets and independent dealers. The company sells passenger cars outside
Germany through subsidiaries and independent importers. Rolls-Royce brand vehicles are sold in the US,
China, and Russia via subsidiary companies and elsewhere by independent, authorized dealers. In
FY2015, the company's worldwide automobile production was 2,279,503 units, and its global sales were
2,247,485 units. The global production included 1,933,647 units of the BMW brand, 342,008 units of the
MINI brand, and 3,848 units of the Rolls-Royce brand. In addition, the company's global sales included
1,905,234 units of the BMW brand, 338,466 units of the MINI brand, and 3,785 units of the Rolls-Royce
brand vehicles.

The financial services segment focuses primarily on car leasing, fleet business, multi-brand business,
retail customer and dealer financing, customer deposit business and insurance activities. The segment
offers its services in more than 50 countries around the world. The segment operates its international
multi-brand fleet business under the brand name Alphabet and provides fleet financing products and
comprehensive management services for corporate car fleets. It managed a portfolio of 602,303 fleet
contracts in FY2015. The segment also offers financing of the BMW brands as well as vehicles of other
manufacturers under the brand name Alphera. The financial services segment also supports the dealer
organization by providing financing for inventories, real estate and equipment. During FY2015, the
company had 4,718,970 credit financing and lease contracts with dealers and retail customers.

The motorcycles segment develops, manufactures, assembles, and sells BMW brand motorcycles as well

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Business Description

as spare parts and accessories. In FY2015, the company sold 136,963 units of BMW brand motorcycles.
In total, 151,004 BMW brand motorcycles were manufactured during FY2015.

The company also reports an 'other entities' segment, which includes holding and group financing
companies. This segment also includes operating companies, BMW Services, Farnborough, BMW (UK)
Investments, Farnborough, Bavaria Lloyd Reiseburo, Munich, and MITEC Mikroelektronik Mikrotechnik
Informatik Munich, which are not allocated to the other segments.

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Bayerische Motoren Werke AG (BMW Group)

History

History

HISTORY
Bayerische Motoren Werke Aktiengesellschaft (BMW or 'the company') was established in 1917 and took
over the Bayerische Flugzeug-Werke (BFW) in 1922, which was founded in 1916. BMW purchased the
car factory at Eisenach/Thuringia in 1928 which had a license to build a small car, the Dixi. The company
also concluded a license agreement with American aircraft-engine manufacturer, Pratt & Whitney to build
radial engines. In 1929, the company produced the first BMW car, Dixi.
During the early 1950s, BMW's global expansion was well underway, with the company exporting nearly
one fifth of all its output. Following losses in the big limousine segment, BMW was put up for sale in 1959.
However, small shareholders and dealers helped BMW to continue with a new capital structure.
The first 5 Series car was launched in 1972. In the same year, BMW Motorsport was founded and the
company built an assembly plant in South Africa. In 1973, the BMW 2002 Turbo from Munich became the
first mass produced turbo vehicle in the world. In 1979, the company supplied the first armored BMW and
began research and development on hydrogen engines. The period also saw cooperation with Steyr
Daimler Puch.
BMW became the first European car company to establish a subsidiary in Japan in 1981. In 1988, the Z1
roadster was launched and the company opened a BMW repair center in Moscow and an import center in
Japan. In 1990, BMW returned to the manufacturing of aero engines by establishing BMW Rolls Royce.
BMW established a research and innovation center in Munich's northern suburbs in 1990, comprising
design, construction and test facilities; a prototype construction unit; and a pilot plant. BMW purchased
the British based car manufacturer, Rover group, in 1994. In the same year, BMW de Mexico was
established. In 1995, BMW concluded a contract for assembly in India. It also established a subsidiary in
Brazil and entered Norway, Finland, and South Korea.
BMW acquired rights to the name 'the Rolls-Royce brand' (cars) in 1998. Subsequently, the company
restructured and sold its Land Rover sports utility vehicle operations to Ford. It also sold Rover Cars unit
to the Phoenix Consortium. In 2001, the company re-launched the Mini brand.
BMW's plan of starting production in China was approved by the state council in 2003. In the same year,
the company formed a joint venture with Brilliance China Automotive Holdings. Also during 2003, BMW
started its operations in Ireland, Denmark, Luxembourg, and Greece through its own subsidiaries.
The company established a new parts distribution center in Malaysia, in late 2003, to serve the AsiaPacific and Oceania region. In 2004, the company acquired information technology companies, Softlab
and Axentiv. In 2005, Softlab acquired two information technology firms, Entory and Anite.
BMW rolled out its first locally-assembled 3-Series, the cheapest car with the BMW badge, in India, during
2007. In the same year, the company acquired DEKRA SudLeasing in Germany.
In 2008, BMW began selling 1-Series hatchbacks in China. In the same year, BMW and Fiat Group
Automobiles (FGA) signed memorandum of understanding for a possible cooperation in the areas of

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History

architecture and components for their MINI and Alfa Romeo vehicles. As part of possible cooperation,
BMW will provide FGA with support in launching the Alfa Romeo brand in the North American market. In
addition, BMW sold 72.9% stake in IT consulting firm, Cirquent (formerly Softlab) to the Japanese
company, NTT Data. Subsequently, BMW Middle East opened a sales center in Oman for premium preowned vehicles.
In 2009, the company launched BMW X5 M and BMW X6 M models. In the same year, BMW India
opened new sales and service outlet in Coimbatore. BMW Motorsport and NGK Spark extended their
partnership in the motorsport arena. Under the terms of the agreement, NGK Spark would supply spark
plugs to BMW teams in Formula One, the World Touring Car Championship (WTCC); and to the
American Le Mans Series (ALMS). Also during the same year, BMW opened BMW Shanghai Training
Center, Asia's biggest BMW training center.
Further in 2009, BMW and the SGL Group agreed on the establishment of a joint venture for the
production of carbon fibers and textile semi-finished products (CFRP) for use in vehicle construction. In
addition, the company entered into a joint venture with Brilliance Automotive Holdings to build a second
production plant in China.
During 2010, BMW announced plans of launching its first series production of electric-drive model in
2013. The vehicle would be a zero-emission urban car and would be sold under the BMW brand. In the
same year, BMW expanded its production capacity and dealer network in India. The company expanded
its production capacity from 3,000 to 5,400 units and dealer network to 22 dealerships.
BMW received an order from Swedish automobile manufacturer, Saab, to supply petrol engines, also in
2010. In the same year, the company and PSA Peugeot Citroen expanded their cooperation to develop
hybrid components for front-wheel-drive vehicles. Furthermore, BMW announced the expansion of its
plant in Leipzig to make it the first location in Germany equipped to handle large-scale production of zeroemission electric cars.
In 2011, BMW and PSA Peugeot Citroen signed an agreement to set up a 50-50 equity joint venture
named BMW Peugeot Citroen Electrification (BMWPCE). BMWPCE would focus on developing and
producing hybrid components, including battery packs, e-machines, generators, power electronics and
chargers, while also developing software for hybrid systems. In the same year, the company launched its
BMW sub-brand, BMW i.
Towards the end of 2011, BMW, through its multi-brand fleet management division Alphabet International,
acquired ING Car Lease, the operational car leasing and fleet management business of ING Groep.
Additionally, BMW acquired a 15.16% stake in SGL Carbon SE.
During 2012, the company announced a $900 million investment to expand the production capacity at its
US plant in South Carolina. In the same year, BMW and Toyota Motor signed an agreement on
collaborative research in the field of next-generation lithium-ion battery cells. In addition, BMW and its
joint venture partner, Brilliance China Automotive Holdings, announced the opening of automobile
production facility in China.
Further in 2012, the company signed a memorandum of understanding with Toyota Motor aimed at long-

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History

term strategic collaboration in four fields, joint development of a fuel cell system, joint development of
architecture and components for a future sports vehicle, collaboration on powertrain electrification and
joint research and development on lightweight technologies. In the late 2012, BMW announced its plans
to build a new plant in Brazil, which would have a production capacity of approximately 30,000 vehicles
per year. By the end of 2012, BMW signed a contract for the sale of Husqvarna with the Austrian
company, Pierer Industrie.
In 2013, BMW and Toyota Motor signed binding agreements aimed at the joint development of a fuel cell
system, joint development of architecture and components for a sports vehicle, and joint research and
development of lightweight technologies. In the same year, BMW and Toyota signed a binding agreement
to commence collaborative research on lithium-air batteries, a post-lithium-battery solution. Subsequently,
Stefan Pierer, the Chief Executive Officer of KTM (an off-road motorbike manufacturer), acquired dirt bike
specialist brand Husqvarna Motorcycles from BMW.
During 2013, BMW i Mobility Services signed an agreement with the Estonian-tech company NOW
Innovations, a new strategic partner, for providing mobile payment and billing solutions. In the same year,
the company advanced its research expertise in Asia by opening the BMW Group Technology Office
China. TVS Motor, a two-wheeler manufacturer in India, and BMW motorcycle division announced a deal
to jointly develop bikes that will give the Indian automaker access to BMW technology. BMW launched
the series version of its electric vehicle, the BMW i3. It is the company's first pure electric series-produced
model. Further in the year, BMW launched the 1-Series in India.
BMW opened a regional parts distribution center (RDC) in Lancaster, Texas, to serve the Southern
Region of the dealer network and supply everything BMW dealers need to service their customers, in
2014.
During 2014, BMW announced plans to spend $1 billion to boost production at its South Carolina
assembly plant by 50% in the next two years. Also, the company announced its plans for a second North
American factory to tap rising demand for its vehicles in the region. The new BMW M4 Convertible was
launched in the same year. In 2014, BMW announced the recall of 232,098 vehicles in China for a
defective bolt design that may damage the engine or cause it to fail to start.
In the mid of 2014, BMW extended its joint venture with Brilliance China Automotive Holdings until 2028.
Subsequently, BMW announced its plan to build a new plant in Mexico in close proximity to the city of
San Luis Potosi.
In 2014, BMW's new armoured X5, the Security Plus, was launched. Also, BMW M GmbH launched the
BMW M4 DTM Champion Edition. Soho House Group (SHG) and BMW i announced a global partnership
across all of SHG's 12 sites in Europe and North America in 2014.
BMW Motorrad unveiled F 800 R and S 1000 RR motorcycles, in 2014.
In January 2015, BMW unveiled the new BMW 6 Series Convertible, the new BMW 6 Series Coupe and
the new BMW 6 Series Gran Coupe at the North American International Auto Show in Detroit. In the
same month, BMW Motorrad opened a flagship concept store in Cape Town, South Africa. BMW
expanded the footprint of its BMW i mobility services with an investment in the parking service provider

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History

Parkmobile International.
Also in January 2015, BMW concluded a strategic partnership with Moovit, local transit app to further
expand the involvement of the BMW i brand in the field of mobility services. In the same month, BMW i
unveiled BMW i Home Charging Services, a solution for home charging of electric and plug-in hybrid
BMW models based on the smart home-enabled BMW i Wallbox Pro system.
The company rolled out the racing car BMW M6 GT3 at its premises in Dingolfing, Germany, during
February 2015.
In April 2015, BMW Motorrad formed a partnership with Alpinestars for motorcycle safety clothing
systems. The first product to be launched under this cooperation will be a BMW Motorrad jacket jointly
developed by BMW Motorrad and Alpinestars, combined with an airbag waistcoat developed using
Alpinestars technology.
In September 2015, BMW, Audi and Mercedes won the US antitrust approval to buy Nokia's maps
business (HERE) for around E2.5 billion ($3.3 billion). In the same month, BMW spent another THB1.1
billion ($30.8 million) to raise production of its passenger cars and motorcycles at its facility in Rayong's
Amata City Industrial Estate, Thailand.
BMW Brilliance Automotive opened new engine plant with light metal foundry in China, in January 2016.
The new location produces the BMW TwinPower Turbo three and four-cylinder petrol engines and forms
part of the BBA production network based in Shenyang in Northeastern China.
BMW introduced self-driving robots in the hall of Supply Logistics, in March 2016.
During April 2016, BMW and SALEWA collaborated their expertise for sustainable mobility and a perfect
outdoor experience for electric mobility.
Further in June 2016, BMW of North America won a contract to supply the Los Angeles Police
Department with 100 fully-electric BMW i3 vehicles for use in the departments transportation fleet.
In the same month, BMW started the construction of a new plant in Mexico. The production of BMW 3
Series Sedan will be started in the plant from 2019.

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Key Employees

Key Employees

KEY EMPLOYEES
Name

Job Title

Norbert Reithofe

Chairman, Supervisory Non Executive Board

Board

Manfred Schoch

Deputy Chairman,
Supervisory Board

Non Executive Board

383920 EUR

Stefan Quandt

Deputy Chairman,
Supervisory Board

Non Executive Board

383920 EUR

Stefan Schmid

Deputy Chairman,
Supervisory Board

Non Executive Board

383920 EUR

Karl-Ludwig Kley

Deputy Chairman,
Supervisory Board

Non Executive Board

377920 EUR

Simone Menne

Member, Supervisory
Board

Non Executive Board

127347 EUR

Christiane Benner

Member, Supervisory
Board

Non Executive Board

357820 EUR

Franz Markus Haniel

Member, Supervisory
Board

Non Executive Board

196960 EUR

Reinhard Huttl

Member, Supervisory
Board

Non Executive Board

196960 EUR

Henning Kagermann

Member, Supervisory
Board

Non Executive Board

196960 EUR

Susanne Klatten

Member, Supervisory
Board

Non Executive Board

196960 EUR

Renate Kocher

Member, Supervisory
Board

Non Executive Board

196960 EUR

Ulrich Kranz

Member, Supervisory
Board

Non Executive Board

196960 EUR

Robert W. Lane

Member, Supervisory
Board

Non Executive Board

196960 EUR

Horst Lischka

Member, Supervisory
Board

Non Executive Board

196960 EUR

Willibald Low

Member, Supervisory
Board

Non Executive Board

196960 EUR

Dominique Mohabeer

Member, Supervisory
Board

Non Executive Board

196960 EUR

Brigitte Rodig

Member, Supervisory
Board

Non Executive Board

196960 EUR

Werner Zierer

Member, Supervisory
Board

Non Executive Board

196960 EUR

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Board

Compensation
2505052 EUR

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Key Employees

Harald Kruger

Chairman, Management Senior Management

Board

6218971 EUR

Friedrich Eichiner

Member, Management
Board; and Head,
Finance

Senior Management

4313952 EUR

Klaus Frohlich

Member, Management
Board; and Head,
Development

Senior Management

3721739 EUR

Peter Schwarzenbauer

Member, Management Senior Management

Board; Head, MINI,
BMW Motorrad, RollsRoyce; and Head,
Aftersales BMW Group

3686789 EUR

Klaus Draeger

Member, Management Senior Management

Board; and Head,
Purchasing and Supplier
Network

4314767 EUR

Ian Robertson

Member, Management Senior Management

Board; Head, Sales and
Marketing BMW; Head,
Sales Channels, BMW
Group

4304471 EUR

Milagros Caina CarreiroAndree

Member, Management
Board; and Head,
Human Resources

Senior Management

4047547 EUR

Oliver Zipse

Member, Management
Board; and Head,
Production

Senior Management

2359616 EUR

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Key Employee Biographies

Key Employee Biographies

KEY EMPLOYEE BIOGRAPHIES

Norbert Reithofe
Board:Non Executive Board
Job Title:Chairman, Supervisory Board
Since:2015
Age:60
Dr. Reithofe has been the Chairman of the Supervisory Board at Bayerische Motoren Werke
Aktiengesellschaft (BMW or 'the company') since 2015. He served as the Chairman of the Management
Board at the company from 2006 until 2015. Previously, Dr. Reithofer served as a member of the
Management Board responsible for production during 2000 to 2006. Prior to that, he served as the
President at BMW Manufacturing in the US. Dr. Reithofer also served as the Technical Director at BMW
South Africa during 1994 to 1997. He served as a Director at the Body-in-White Production division during
1991 to 1994.

Manfred Schoch
Board:Non Executive Board
Job Title:Deputy Chairman, Supervisory Board
Since:1988
Age:61
Mr. Schoch has been a Deputy Chairman of the Supervisory Board at BMW since 1988. He also serves
as the Chairman at Works Council, Munich, General Works Council, and European Works Council. Mr.
Schoch has been the Alternate President of the Board of Directors at the BMW health insurance fund
since 1994.

Stefan Quandt
Board:Non Executive Board
Job Title:Deputy Chairman, Supervisory Board
Since:1999
Age:50
Mr. Quandt has been a Deputy Chairman of the Supervisory Board at BMW since 1999. He has been an
independent entrepreneur since 1996.

Stefan Schmid
Board:Non Executive Board
Job Title:Deputy Chairman, Supervisory Board

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Key Employee Biographies

Since:2008
Age:51
Mr. Schmid has been a Deputy Chairman of the Supervisory Board at BMW since 2008. He joined the
company in 1985. Mr. Schmid has been serving as the Chairman at the Works Council, Dingolfing since
1995. He serves as the Chairman of the Works Council, Dingolfing and Deputy Chairman of the General
Works Council since 2004.

Karl-Ludwig Kley
Board:Non Executive Board
Job Title:Deputy Chairman, Supervisory Board
Since:2010
Age:65
Dr. Kley has been a Deputy Chairman of the Supervisory Board at BMW since 2010. From 1982 to 1998
he worked at Bayer in the finance and pharmaceutical divisions, also in Japan and Italy. Dr. Kley was a
member of the Executive Board at Lufthansa's Finance Division from 1998 to 2006. Since 2007, he has
been the Chairman of the Executive Board at Merck.

Simone Menne
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2015
Age:56
Ms. Menne has been a member of the Supervisory Board at BMW since 2015. She also serves as a
member of the Executive Board at Deutsche Lufthansa, responsible for Finance and Aviation Services
since 2012.

Christiane Benner
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2014
Age:48
Ms. Benner has been a member of the Supervisory Board at BMW since 2014. She has also been the
Managing Partner at IG Metall since 2011.

Franz Markus Haniel

Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2004

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Key Employee Biographies

Age:61
Mr. Haniel has been a member of the Supervisory Board at BMW since 2004. He served as a Consultant
at Booz Allen & Hamilton, and as the Chief Executive Officer at SkiData. Mr. Haniel was a member of the
Management Board at Giesecke & Devrient in 2006.

Reinhard Huttl
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2008
Age:59
Dr. Huttl has been a member of the Supervisory Board at BMW since 2008. He served as a Scientific
Advisor at the World Resources Institute from 1987 to 1990. Dr. Huttl has been a Scientific Executive
Director and Chairman of the Academic Board of Directors at the German Research Centre for
Geosciences since 2007. He also served as the President at acatech German Academy of Science and
Engineering and a member of the German Federal Government's Secure Energy Supply Ethics
Committee.

Henning Kagermann
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2010
Age:69
Dr. Kagermann has been a member of the Supervisory Board at BMW since 2010. In 1982, he joined
SAP as a Senior Executive. Dr. Kagermann served as the Chief Executive Officer at SAP from 1998 to
2009. Since 2010 he served as the Chairman of the Steering Committee of the National Platform for
Electromobility.

Susanne Klatten
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:1997
Age:54
Ms. Klatten has been a member of the Supervisory Board at BMW since 1997. She has been an
independent entrepreneur since 1991.

Renate Kocher
Board:Non Executive Board
Job Title:Member, Supervisory Board

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Key Employee Biographies

Since:2008
Age:64
Dr. Kocher has been a member of the Supervisory Board at BMW since 2008. She is also a Director at
Allensbach Institute for Public Opinion Research since 1988.

Ulrich Kranz
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2014
Age:58
Mr. Kranz has been a member of the Supervisory Board at BMW since 2014. He has been the Head of
BMW i since 2007.

Robert W. Lane
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2009
Age:67
Mr. Lane has been a member of the Supervisory Board at BMW since 2009. He served as the Chairman
and Chief Executive Officer at Deere & Company from 2000 until 2009.

Horst Lischka
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2009
Age:53
Mr. Lischka has been a member of the Supervisory Board at BMW since 2009. He has been the General
Representative at IG Metall Munich since 2008. Mr. Lischka has been an honorary member of the
Executive Board at IG Metall since 2011.

Willibald Low
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:1999
Age:60
Mr. Low has been a member of the Supervisory Board at BMW since 1999. He joined the company in
1979. Mr. Low is the Chairman at the Works Council, Landshut since 1994.

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Key Employee Biographies

Dominique Mohabeer
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2012
Age:53
Dr. Mohabeer has been a member of the Supervisory Board at BMW since 2012. She joined the
company in 2000. Dr. Mohabeer has been a member of the Works Council, Munich since 2002.

Brigitte Rodig
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2013
Age:53
Ms. Rodig has been a member of the Supervisory Board at BMW since 2013. She joined the company in
1982. Ms. Rodig has been a member of the Works Council, Dingolfing since 1987. Since 2010 she
served as the Deputy Chair of the Committee for Occupational Safety of the General Works Council at
BMW.

Werner Zierer
Board:Non Executive Board
Job Title:Member, Supervisory Board
Since:2001
Age:57
Mr. Zierer has been a member of the Supervisory Board at BMW since 2001. He joined the company in
1985. Mr. Zierer has been the Chairman of the Works Council, Regensburg since 2000.

Harald Kruger
Board:Senior Management
Job Title:Chairman, Management Board
Since:2015
Age:51
Mr. Kruger has been the Chairman of the Management Board at BMW since 2015. He has been a
member of the Management Board and the Head of Production from 2013 to 2015. Mr. Kruger joined
BMW in 1992. From 1997 to 2000 he served as the Head of the Strategic Production Planning
Department, Munich. Mr. Kruger was the Head of Production Strategy and Communication, Munich from
2000 to 2003. In 2012, he became a member of the Board of Management responsible for BMW, MINI,
Motorrad and Rolls-Royce, and for Aftersales at the BMW Group.

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Key Employee Biographies

Friedrich Eichiner
Board:Senior Management
Job Title:Member, Management Board; and Head, Finance
Since:2008
Age:61
Dr. Eichiner has been a member of the Management Board; and the Head of Finance at BMW since
2008. Previously, he served as a member of the Management Board responsible for corporate and brand
development during 2007. Prior to that, Dr. Eichiner served as a Director of Corporate Planning during
2002 to 2007. He also served as a Director of Sales Development and Sales Management during 1999 to
2002. From 1987 to 1999, Dr. Eichiner held various executive and project management functions in the
areas of logistics and production.

Klaus Frohlich
Board:Senior Management
Job Title:Member, Management Board; and Head, Development
Since:2014
Age:56
Mr. Frohlich has been a member of the Management Board; and the Head of Development at BMW since
2014. He was the Head of Small and Mid-sized Series Product Line from 2012 to 2014, and the Head of
Brand and Product Strategies from 2007 to 2012 at the group. Mr. Frohlich served as the Head of
Development Pre-development Petrol Engines from 1999 to 2001. From 1993 to 1995, he served as the
Head of Basic Development V8 Engines at the group.

Peter Schwarzenbauer
Board:Senior Management
Job Title:Member, Management Board; Head, MINI, BMW Motorrad, Rolls-Royce; and Head, Aftersales
BMW Group
Since:2013
Age:57
Mr. Schwarzenbauer has been a member of the Management Board; the Head of MINI, BMW Motorrad,
Rolls-Royce; and Head, Aftersales BMW Group at BMW since 2013. He was the Head of Sales for
Germany at Porsche from 1994 to 1997. Mr. Schwarzenbauer served at Porsche Iberica from 1997 to
2003. He served as the President and Chief Executive Officer at Porsche Cars North America from 2003
to 2008. From 2008 to 2012, Mr. Schwarzenbauer was a member of the Board of Management at Audi,
responsible for marketing and sales.

Klaus Draeger
Board:Senior Management

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Key Employee Biographies

Job Title:Member, Management Board; and Head, Purchasing and Supplier Network
Since:2012
Age:59
Dr. Draeger has been a member of the Management Board; and the Head of the Purchasing and Supplier
Network at BMW since 2012. He served as the Head of Purchasing for Special Models, Vehicle Interiors,
as well as Auto Body Development. Dr. Draeger was a Director of Large Model Series from 2004 to 2006.

Ian Robertson
Board:Senior Management
Job Title:Member, Management Board; Head, Sales and Marketing BMW; Head, Sales Channels, BMW
Group
Since:2012
Age:58
Dr. Robertson has been a member of the Management Board; the Head of Sales and Marketing BMW at
BMW since 2015. He is also the Head of Sales Channels at the company. He served as the Purchasing
Director at Rover Group and Managing Director of Land Rover Vehicles from 1991 to 1999. From 2005 to
2008, Dr. Robertson served as the Chairman and Chief Executive at Rolls-Royce Motor Cars.

Milagros Caina Carreiro-Andree

Board:Senior Management
Job Title:Member, Management Board; and Head, Human Resources
Since:2012
Age:54
Ms. Carreiro-Andree has been a member of the Management Board; and the Head of Human Resources
at BMW since 2012. From 2006 to 2011, she served as the Head of Corporate Executives, Executive
Staff Development and Support unit at Deutsche Bahn.

Oliver Zipse
Board:Senior Management
Job Title:Member, Management Board; and Head, Production
Since:2015
Age:52
Mr. Zipse has been a member of the Management Board; and the Head of Production at BMW since
2015. Prior to this, he served as the Senior Vice President of Corporate Planning and Product Strategy
from 2012 to 2015. He joined BMW as a Trainee in Development and Production in 1991. From 1992 to
1994 Mr. Zipse served as a Project Engineer for Technology Innovation. He also served in various
leading functions in Development, Production and Production Planning in Munich and South Africa from
1994 to 2006. From 2007 to 2008 Mr. Zipse served as the Managing Director Plant Oxford, the UK and
from 2009 to 2012 as the Senior Vice President Technical Planning.

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Major Products & Services

Major Products & Services

MAJOR PRODUCTS & SERVICES

Bayerische Motoren Werke Aktiengesellschaft (BMW or 'the company') is one of the leading
manufacturers of premium cars and motorcycles.

The company's key products and services include the following:

Products:

Cars
Motorcycles
Pre-owned automobiles
Vehicle parts and accessories

Services:

Car leasing services

Retail customer and dealer financing
Insurance services

Brands:

BMW
MINI

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Major Products & Services

Rolls-Royce
BMW Motorrad
Alphera
Alphabet

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Revenue Analysis

Revenue Analysis

REVENUE ANALYSIS
Overview

Bayerische Motoren Werke Aktiengesellschaft (BMW or 'the company') recorded revenues of E92,175
million ($102,319.8 million) during FY2015, an increase of 14.6% over FY2014. In FY2015, the US, the
company's largest geographic market, accounted for 19.7% of the total revenues.

BMW generates revenues through four business segments: automobiles (73.8% of the total revenues in
FY2015), financial services (24%), motorcycles (2.2%), and other entities (ng*).

*ng stands for negligible.

Revenue by segment

In FY2015, the automobiles segment recorded revenues of E68,045 million ($75,534 million), an increase
of 14.1% over FY2014.

The financial services segment recorded revenues of E22,144 million ($24,581.2 million) in FY2015, an
increase of 16.1% over FY2014.

The motorcycles segment recorded revenues of E1,984 million ($2,202.4 million) in FY2015, an increase
of 18.7% over FY2014.

The other entities segment recorded revenues of E2 million ($2.2 million) in FY2015, a decrease of 33.3%
as compared to FY2014.

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Revenue Analysis

Revenue by geography

The US, BMW's largest geographic market, accounted for 19.7% of the total revenues in FY2015.
Revenues from the US reached E18,155 million ($20,153.1 million) in FY2015, an increase of 32.8% over
FY2014.

China accounted for 17.2% of the total revenues in FY2015. Revenues from China reached E15,856
million ($17,601.1 million) in FY2015, an increase of 5.7% over FY2014.

Germany accounted for 14.5% of the total revenues in FY2015. Revenues from Germany reached
E13,394 million ($14,868.1 million) in FY2015, an increase of 3.1% over FY2014.

Rest of Europe accounted for 31% of the total revenues in FY2015. Revenues from rest of Europe
reached E28,617 million ($31,766.6 million) in FY2015, an increase of 16.2% over FY2014.

Rest of the Americas accounted for 3.6% of the total revenues in FY2015. Revenues from rest of the
Americas reached E3,361 million ($3,730.9 million) in FY2015, an increase of 13.5% over FY2014.

Other regions accounted for 13.9% of the total revenues in FY2015. Revenues from other regions
reached E12,792 million ($14,199.9 million) in FY2015, an increase of 14.8% over FY2014.

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SWOT Analysis

SWOT Analysis

SWOT ANALYSIS
Bayerische Motoren Werke Aktiengesellschaft (BMW or 'the company') is one of the leading
manufacturers of premium cars and motorcycles. BMW owns three of the strongest premium brands in
the automobile industry. A strong global position in the premium automobile market enables the company
to sustain and enhance its profitability as well as positions it to generate long-term growth. On the other
hand, the sustained weak economic performance by major economies could have an adverse impact on
the automobile industry which could in turn affect the revenues and profitability of the company.
Strength

Weakness

Strong position in the international premium

automobile market
Robust focus on research and development

Frequent product recalls

Unfunded pension obligations

Opportunity

Threat

Growing global market for electric vehicles

Positive outlook of global automotive manufacturing
industry
Targeted expansion of global production network

Slow growth of global economy

Intense market competition
Foreign currency risk

Strength
Strong position in the international premium automobile market
BMW owns three of the strongest premium brands in the automobile industry. The company offers
customers a full spectrum of premium products, from MINI in the small car segment to Rolls-Royce in the
ultra-luxury class. In addition to its strong position in the automotive market, BMW also offers a range of
financial services. The company sold a total of 2,247,485 BMW, MINI, and Rolls-Royce brand vehicles
during FY2015. Individually, these three automobile brands posted record sales, with 1,905,234 BMW
vehicles, 338,466 MINI vehicles, and 3,785 Rolls-Royce motor cars. Despite increasing uncertainties in
many markets, particularly in Europe, BMW retained its top position in the premium segment worldwide.
In addition to retaining the dominant position for the BMW brand in the premium segment as a whole, the
BMW 3 Series, 5 Series and 6 Series models and the BMW X1 each consolidated their leading positions
in their respective segments of the market.

Thus, strong global position in the premium automobile market enables the company to sustain and
enhance its profitability as well as positions it to generate long-term growth.
Robust focus on research and development

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SWOT Analysis

BMW has a strong focus on research and development (R&D) to manufacture high quality premium
products. During FY2015, a total of 12,669 employees were engaged throughout the companys global
research and innovation network at 13 locations spread over five countries, to deliver the highest product
quality and develop innovative technologies. The company spends heavily on R&D to develop new
products as well as to improve existing products. For instance, in FY2015, R&D expenditure of the
company was E5,169 million ($5,737.9 million). In line with this, the company has launched new products
in the past year. For instance, as a successor to the 1 Series Convertible, the new BMW 2 Series
Convertible was launched in February 2015. The BMW X5 M and X6 M models were launched in March
2015 and the updated models of the BMW 6 Series and M6 vehicles as well as the BMW 1 Series were
also been launched in March 2015.

Therefore, the company's strong emphasis on R&D enables it to deliver new and innovative products that
help in generating higher revenues and profitability.

Weakness
Frequent product recalls
In the recent past, BMW issued various product recalls that cover some of its most popular models. For
instance, in May 2016, the company recalled its BMW 7 series sedan in Australia due to an error in the
manufacturing process of the supplier. Earlier in April 2015, BMW recalled 53,317 imported X3 models in
China because a fault in the engine wiring harness and fuel supply system could cause the vehicles to
short circuit. Also in March 2015, the company recalled nearly 49,000 motorcycles in the US and Canada
because flanges that hold the rear wheel can crack if bolts are too tight. Later

Thus, significant product recalls like these could negatively impact the consumer loyalty in BMW's
products which in turn could negatively affect its brand image. Additionally, the occurrence of large
expenses for a large-scale recall to ensure safety of the customers may weaken the performance and
financial conditions of the company.
Unfunded pension obligations
BMW has significant unfunded pension obligations. The company provides retirement benefits for most of
its employees, either directly or by contributing to independently administered funds. In FY2015, the
company's fair value of planned pension assets stood at E16,930 million ($18,793.3 million) as compared
to defined benefit obligations of E19,926 million ($22,119.1 million), resulting into an unfunded status of
E2,999 million ($3,329.1 million). Going ahead, the volatility in financial markets (equity and debt) could
lead to decline in pension fund asset values.

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SWOT Analysis

Thus, unfunded pension obligation would force the company to make regular cash contributions to bridge
the gap between pension assets and liabilities, which in turn could pressurize the liquidity position of the
company.

Opportunity
Growing global market for electric vehicles
BMW is highly focused on electro-mobility. The global market for electric vehicles represents a huge
opportunity for the company and is showing positive development. The demand for hybrid electric
vehicles (HEVs) across the world is rising steadily mainly due to global concerns about reducing carbon
emissions coupled with highly volatile prices of fuel. According to industry estimates, sales of electric
vehicles are expected to reach 41 million by 2040, representing 35% of new light duty vehicle sales. This
would be almost 90 times the equivalent figure for 2015, when electric vehicle sales were 462,000. The
key markets for HEVs include the US, Western Europe, and Japan, although the rapidly growing Chinese
market is also expected to experience relatively strong demand for these fuel efficient and
environmentally friendly vehicles.

To position itself in this growing market for sustainable mobility, the company launched BMW i3, a
premium electric car. Also, BMW i vehicles are currently on sale in 50 countries and over 80% of BMW i
buyers are first-time customers for the company. Additionally, in July 2015, the company started
production of its eBike at the Pedelec factory HNF Heisenberg which is powered by the BMW i. In August
2015, the company planned to commission 400 BMW i3 in Copenhagen by September 2015. In autumn
2015, the company released its first plug-in hybrid BMW X model, the BMW X5 xDrive40e, which
incorporates the technological expertise gained from BMW i. Moreover, the company has collaborated
with Toyota Motor in the field of sustainable mobility. Thus, increased focus on the growing global market
for electric vehicles could help BMW further enhance its product offering as well as grow its sales volume,
revenues and earnings.
Positive outlook of global automotive manufacturing industry
The global automotive manufacturing industry has produced relatively consistent levels of growth over the
past few years. The industry is expected to continue to grow positively till 2018. According to MarketLine,
the global automotive manufacturing industry generated total revenues of $1,252.6 billion in 2015, an
increase of 3.1% over 2014. Furthermore, the industry is expected to grow at a CAGR of 8% for the
201519 period to reach a value of approximately $1,577.1 billion in 2019. In addition, the industry
production volume is expected to rise to 189 million units by the end of 2019, representing a CAGR of 7%
for the 201519 period.

BMW's automobiles segment develops, manufactures, assembles and sells cars and off-road vehicles. It

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SWOT Analysis

also sells automotive spare parts and accessories. In Germany, BMW and MINI brand products are sold
through company owned outlets and independent dealers. In addition, Rolls-Royce brand vehicles are
sold in the US, China and Russia via subsidiary companies and elsewhere by independent, authorized
dealers. Thus, the positive outlook of global automotive manufacturing industry could provide immense
opportunities to BMW to boost up revenues and market share.
Targeted expansion of global production network
BMW continue to aim for a balanced distribution of sales between the three main economic regions of the
world. The company is strategically expanding its global production network of currently 30 sites in 14
countries. The second engine plant in Shenyang was opened in January 2016. In Mexico, BMW is
constructing a new plant in San Luis Potosi and are currently expanding its largest production site in
Spartanburg, the US in order to be able to meet the high demand for its premium sports activity vehicles.

Moreover Europe is still the companys largest sales region. Last year they reached the mark of one
million vehicles sold there for the very first time. Overall, close to 45% of its cars were delivered to
customers in Europe. Asia accounted for approximately 30% of sales, the Americas for 22%. Moreover
the company also planned to increase local production at the Shenyang facility in China, which is set to
build six BMW models specifically for the Chinese market. The company has already extended its joint
venture with Brilliance to 2028, thereby paving the way for further growth in China. These planned
expansions would have a twofold effect on the company firstly by increasing the company's market share
and by helping the company take advantage of the increasing demand for new vehicles globally.

Threat
Slow growth of global economy
The automobile industry is under immense pressure due to the poor performance of global economies.
High public debt levels in Europe, the US and Japan, and the unresolved conflicts in the Middle East and
East Asia continue to pose risk factors which could have a material, unexpectedly adverse impact on the
industry in FY2015. For instance, after two years of recession, the company expects the Eurozone to
grow at a rate of only approximately 3.2% in FY2016. Also, the company assumes a growth rate of only
1.2 % for France, where internal political conflicts and the loss of international competitiveness still pose
significant risks for the economy in that country. Spain and Italy too are not expected to perform well in
the automobile sector. In Brazil and Russia, stagnating or falling raw materials prices are likely to have an
unfavorable impact on exports thereby affecting the economy.

Thus, weak economic performance by major economies could have an adverse impact on the automobile
industry which could in turn affect the revenues and profitability of BMW.
Intense market competition

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SWOT Analysis

The worldwide automotive market is highly competitive. BMW faces strong competition from large
automotive manufacturers in its various markets. The competition among various auto players is likely to
intensify in light of continuing globalization and consolidation in the worldwide automotive industry. The
factors impacting competition include product quality and features, safety, price, environmental
performance, as well as efficiency of product development and manufacturing system, establishment of
sales and service systems and sales finance. The company's major competitors include Renault, Ford
Motor, Volkswagen, Daimler, General Motors, Toyota Motor, Hyundai Motor, Volvo, Yamaha, Tesla
Motors, and others.

Hence, increased competition may lead to lower vehicle unit sales and increased inventory, which may
result in a further downward price pressure and adversely impact the company's financial condition and
results of operations.
Foreign currency risk
BMW is an enterprise with worldwide operations. It is a global company that sells its products in more
than 140 countries. Its vehicles are produced at 30 locations in 14 countries. The company's businesses
are conducted in a variety of currencies, from which currency risks arise. The company generates
approximately 54.5% of its revenues from markets outside Europe. Since a significant portion of the
company revenues are generated outside the Euro currency region and the procurement of production
material and funding are also organized on a worldwide basis, the currency risk is an extremely important
factor for BMW earnings. Any changes in demand and refinancing conditions, fluctuations in exchange
rates have a significant impact on the company's earnings. This related in particular to the US Dollar (the
main source of risk in BMW's currency portfolio), the Japanese Yen, the British Pound, and the Chinese
Renminbi.

The value of the company's equity investment in foreign countries may fluctuate based upon changes in
foreign currency exchange rates. These fluctuations, which are recorded in a cumulative translation
adjustment account, may result in losses in the event a foreign subsidiary is sold or closed at a time when
the foreign currency is weaker than when the company initially invested in the country. Therefore, any
unfavorable change in other currencies would have an adverse impact on the profitability of the company.

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Top Competitors

Top Competitors

TOP COMPETITORS
The following companies are the major competitors of Bayerische Motoren Werke AG (BMW Group)
AB Volvo
Daimler AG
Ford Motor Company
General Motors Company
Renault SA
Tesla Motors, Inc.
Toyota Motor Corporation
Volkswagen AG
Yamaha Motor Co., Ltd.

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Company View

Company View

COMPANY VIEW
A statement by Norbert Reithofer, the Chairman of the Supervisory Board at Bayerische Motoren Werke
Aktiengesellschaft, is given below. The statement has been taken from the company's Annual Report for
FY2015.

Dear Shareholders,

Despite the volatile conditions prevailing on various markets, the BMW Group finished the financial year
2015 with another outstanding earnings performance, reaffirming its position as market leader in the
premium segment.

The BMW Group is now headed by Harald Krger, who became the new Chairman of the Board of
Management on 13 May 2015. With this carefully planned generational change at the top of the Board of
Management, the Supervisory Board has not only ensured personnel continuity, it has also made an
important contribution to shaping the future strategy of the BMW Group.

Main emphases of the Supervisory Boards monitoring and advisory activities The Supervisory Board
performed the duties charged to it in accordance with the law and the Articles of Incorporation with the
utmost care. Throughout the financial year 2015, the Supervisory Board closely monitored the BMW
Groups business performance and macroeconomic developments on important markets, diligently
supervised the governance of the Board of Management and advised it on significant projects and plans.

In a total of five meetings, the Supervisory Board deliberated at great length on the current business and
financial situation of the Group. Further topics of particular focus and consultation at Supervisory Board
meetings were corporate strategy (including a whole range of key topics involving the future shape of
business), corporate forecasts and the strategy and management of the Financial Services segment. In
addition, decisions were taken regarding personnel changes on the Board of Management and with
respect to corporate governance.

Furthermore, the Supervisory Board attentively monitored the BMW Groups business performance, both
at scheduled meetings and at other times, as the need arose. In particular, the Board of Management
provided regular reports on current sales and workforce figures. The Chairman of the Board of

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Management kept the Chairman of the Supervisory Board well informed, both promptly and directly, on
the progress of important business projects and plans of strategic significance. In addition to scheduled
meetings, Dr Friedrich Eichiner, member of the Board of Management responsible for Finance, and Dr
Karl-Ludwig Kley, the Chairman of the Supervisory Boards Audit Committee, consulted with each other
directly at other times.

In its regular reports on the financial condition of the Group, the Board of Management provided
information on sales volume developments, market competition issues relevant for the Automotive and
Motorcycles segments, and changes in the size of the workforce. The Board of Management also dealt
with questions regarding economic developments and the prospects of the worlds key regions. On the
Financial Services side of the business, the Board of Management provided regular updates on new
business with retail customers and changes in the portfolio of contracts with dealerships and retail
customers as well as the total volume of business. In its regular reports on the financial condition of the
Group, the Board of Management also reported to the Supervisory Board on any variances from budget.

Major transactions and projects were highlighted in the Board of Managements reports on business
developments, and deliberated on in subsequent discussions. For example, the Supervisory Board was
kept informed of the status of acquisition projects, such as the joint acquisition of the navigation data
provider HERE in conjunction with other partners as well as the purchase of a leasing company in China.
Furthermore, the Board of Management reported on the BMW Groups compliance with emissions limits
and confirmed that no distinction is made between dyno mode and on-road testing when measuring the
exhaust emissions of BMW Group vehicles. Over the course of the year under report, the two boards
discussed at length economic developments and business performance in China. Other subjects of
discussion were progress in the field of electric mobility, product quality and customer satisfaction.

Furthermore, the Board of Management provided detailed information on both the ongoing status and its
plans for expanding capacities at various BMW Group production sites.

At the first Supervisory Board meeting of the year, the Board of Management presented the new and
updated models scheduled for market launch in the course of 2015.

One of the Supervisory Board meetings was held at the Landshut (Germany) site, at which the focus was
placed on purchasing strategy and the significance of BMW component-producing plants in terms of
purchasing and production. The Board of Management also elaborated on the requirements that result
from the distribution of sales volume and production sites across the world for the Groups purchasing
team and discussed with the Supervisory Board the measures necessary to establish a capable supplier

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Company View

base in growth markets. During its visit to the plant, the Supervisory Board inspected the foundry as well
as the production facilities for electric motors and CFRP components.

The main topics discussed at a two-day meeting of the Supervisory Board held during the second half of
the year were business and product strategy as well as long-term corporate planning.

During the first part of the meeting, the Board of Management reported on the results of the annual
Number ONE corporate strategy review. The Board of Management also provided information on the
planned further development of the Groups vehicle portfolio and its intention to continue its collaboration
with Toyota. In view of the increasing regulation of toxic emissions on key markets, the two boards
discussed the challenges facing the Group in the field of alternative drive technologies going forward and
the strategic importance of electric mobility. The Board of Management also reported in depth on topics
relating to the changing market environment and potential business opportunities emerging in connection
with digitalization and vehicle connectivity, and provided an overview of its plans and activities in this field.
The Supervisory Board also gathered facts and figures on the BMW lightweight construction strategy.

As part of a series of vehicle presentations, members of the Supervisory Board took the opportunity to
drive selected BMW and MINI models on a test track, including the latest BMW 7 Series. Furthermore, the
current state of progress of selected vehicle development projects was presented and explained to the
Supervisory Board.

In the second part of the meeting, the Supervisory Board deliberated at length on the long-term corporate
forecast presented by the Board of Management for the years 2016 to 2021. The Board of Management
also described various crisis scenarios to the Supervisory Board. The Supervisory Board lauded the
management teams efforts to keep a tight control over fixed costs. After thorough examination and
lengthy discussion, the Supervisory Board gave the plans its formal approval.
The performance and strategic direction of the Financial Services segment as well as risk management in
this area were also reported on. The consequences of stricter regulation of financial services were also
discussed.

The Supervisory Board deliberated on the annual budget presented by the Board of Management for the
financial year 2016, including the main external influencing factors identified.

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Again in 2015, the Personnel Committee and the full Supervisory Board examined both the structure and
the amount of compensation that Board of Management members receive. In addition to reviewing trends
in business performance and board compensation on a multi-year basis, consideration was also given to
the development of the remuneration of senior management and employees of BMW AG within Germany
over the course of time. An external compensation consultant, independent of both the Board of
Management and BMW AG, was called upon to provide expert advice and assist the Supervisory Board
in the evaluation of DAX compensation studies. After a careful review, the Supervisory Board concluded
that the level of compensation of board members, including pension entitlements, is appropriate and that
the compensation system has proved its worth. The Supervisory Board therefore resolved not to propose
any changes to the system of Board of Management compensation in 2015.

Further information on the compensation of Board of Management members is provided in the

Compensation Report (see section Statement on Corporate Governance).

In 2015, the Board of Management and the Supervisory Board again conducted an in-depth review of the
corporate governance standards currently in place in the BMW Group as well as the rules set out in the
German Corporate Governance Code. In the most recent Declaration of Compliance issued in December
2015, both boards decided that the BMW Group should comply with all of the recommendations issued by
the German Government Corporate Governance Code Commission on 12 June 2015, except for the
disclosure of Board of Management members compensation in prescribed model tables, as the
Supervisory Board is of the opinion that these tables do not improve the clarity and comprehensibility of
the Compensation Report. The wording of the Declaration of Compliance is contained in the Corporate
Governance Report.

Both the Personnel Committee and the Supervisory Board again asked the Board of Management to
describe the state of progress in implementing the BMW Groups diversity concept. This programme not
only relates to gender diversity, it also promotes both cultural diversity and a balanced mixture of age
groups among staff. The Board of Management also reported on the percentage of and development of
female executives at various management levels within the Group and the targets determined by the
Board of Management for the two executive levels immediately below it. In addition, the Board of
Management reported to the Supervisory Board on measures to develop young talent for future strategic
fields of expertise.

The Supervisory Board also consulted on the consequences of legislation relating to the equal
participation of women and men in management positions in Germany for the BMW Groups two boards.
As its target for the proportion of women on the Board of Management by 31 December 2016, the
Supervisory Board has stipulated that the Board of Management should continue to have at least one
female member. Assuming the Board of Management continues to comprise eight members, this would

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correspond to a ratio of at least 12.5 %. The fact that the Supervisory Board considers it desirable to
increase the proportion of women on the board further supports the Board of Managements current raft
of measures, which is also aimed at increasing the proportion of women at the highest executive
management levels of the BMW Group.

The legal minimum of 30 per cent of female and male members in the Supervisory Board that came into
force on 1 January 2016 is already being complied with, both in terms of the Supervisory Board in its
entirety and also for both shareholder and employee representatives.

The Supervisory Board decided upon specific appointment objectives for its own composition based on a
detailed composition profile, a description of which is provided in the Corporate Governance Report. In
line with a new recommendation contained in the German Corporate Governance Code, the appointment
objectives have been supplemented to include a maximum length of office on the Supervisory Board.
Based on a self-assessment, the Supervisory Board determined that its composition at 31 December
2015 complied with its appointment objectives.

In the financial year 2015, the Personnel Committee took the decision to disburse any costs to current
and former members of the Board of Management that could arise in connection with a civil action
brought by a former supplier in the USA. As a former member of the Board of Management, I did not
personally vote on this resolution, which was taken as a precautionary measure.

Apart from this matter, there were no indications of possible conflicts of interest on the part of Supervisory
Board members in the financial year 2015. Significant transactions with Supervisory Board members and
other related parties as defined by IAS 24, including close relatives and intermediate entities, are
monitored in the form of quarterly requests for relevant information.

The Supervisory Board endeavours to assess and continuously improve the efficiency of its work,
including that of its committees. Once a year, the efficiency examination is dealt with as a separate
agenda point, at which the members of the Board of Management are not present. Preparations for the
examination are facilitated by means of a questionnaire. As a result of the efficiency examination,
suggestions for additional topics of report were made during the year under report.

Each of the five Supervisory Board meetings in 2015 was attended on average by 95 per cent of its
members, a fact that can be corroborated by the analysis of attendance fees for individual members, as

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disclosed in the Compensation Report. None of the members of the Supervisory Board took part in only
half or less than half of the meetings of the Supervisory Board, the Presiding Board or the committees to
which the members belong during their terms of office in the period under report.

Description of Presiding Board activities and committee work In order to work more efficiently and prepare
complex issues and decisions with greater thoroughness, the Supervisory Board has established a
Presiding Board and several committees. A description of the duties, composition and working
procedures of these committees is provided in the Corporate Governance Report. The relevant chairmen
reported at length on the status of Presiding Board and committee work at the subsequent Supervisory
Board meeting.

In a total of four meetings, the Presiding Board focused mainly on preparing topics for the meetings of the
full Supervisory Board, unless these fell under the remit of one of the committees. The treatment of more
extensive issues, such as the Long-term Business Forecast and the Annual Strategic Review, was
prepared by the Presiding Board on the basis of written and oral reports provided by Board of
Management members and senior department heads. The Presiding Board selected further topics of
discussion for Supervisory Board meetings and made suggestions to the Board of Management regarding
items to be included in its reports to the full Supervisory Board.

The Audit Committee held four meetings and three telephone conference calls during 2015. In those
telephone conference calls, the Audit Committee deliberated with the Board of Management on each of
the BMW Groups Quarterly Reports, prior to their publication. Representatives of the external auditors
were present during the telephone conference call held to present the Interim Financial Report for the sixmonth period ended 30 June 2015. The report had been subjected to review by the external auditors.

The Audit Committee meeting held in spring 2015 was primarily dedicated to preparing the Supervisory
Board meeting at which the financial statements were examined. Prior to proposing KPMG AG
Wirtschafts-prfungsgesellschaft for election as Company and Group auditor at the Annual General
Meeting 2015, the Audit Committee obtained a Declaration of Independence from the proposed auditor.
The Audit Committee also considered the scope and composition of non-audit services, including tax
advisory services provided by KPMG entities to the BMW Group. There were no indications of conflicts of
interest, grounds for exclusion or lack of independence on the part of the auditor.

The fee proposals for the audit of the year-end Company and Group Financial Statements 2015 and the
review of the six-month Interim Financial Report were deemed appropriate by the Audit Committee.
Subsequent to the Annual General Meeting 2015, the Audit Committee therefore appointed KPMG AG for

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Company View

the relevant engagements and specified audit focus areas. The Head of Group Controlling reported to the
Audit Committee on the current risk profile and on risk management processes and developments within
the BMW Group.

The Head of Group Financial Reporting provided a description of various aspects of the internal control
system (ICS) underlying financial reporting and explained measures being taken to further improve the
system. Testing performed during the year under report did not highlight any material ICS weaknesses
that could jeopardise the systems effectiveness.

The Chairman of the BMW Group Compliance Committee reported to the Audit Committee on the current
compliance situation, which, as in the previous year, was deemed satisfactory overall. None of the
information received relating to potential non-compliance or actual incidences of non-compliance
identified in specific cases give any indication of serious or systematic non-compliance with applicable
requirements. Moreover, the Audit Committee requested and received information regarding the further
expansion of the BMW Group Compliance Organisation.

The Head of Group Internal Audit reported to the Audit Committee on significant findings of audits
conducted by Group Internal Audit on the industrial and financial services sides of the business. In
addition, he provided information on the main topics of planned audits in both areas. The Audit
Committee has already obtained detailed information regarding audit reforms within the EU, particularly
with respect to preparing the selection of the auditor.

The Audit Committee and Supervisory Board obtained an auditors assurance report regarding
compliance with regulatory requirements for off-market transactions made by BMW AG involving
derivatives. The effectiveness of the system that BMW AG currently employs to ensure compliance with
regulatory requirements was confirmed. With an addition to its procedural rules, the Supervisory Board
transferred tasks related to examinations of this type to the Audit Committee.

The Audit Committee concurred with the decision of the Board of Management to raise the Companys
share capital in accordance with 4 (5) of the Articles of Incorporation (Authorised Capital 2014) by
309,860 and to issue a corresponding number of new non-voting bearer shares of preferred stock, each
with a par value of 1, at favourable conditions to employees.

The Personnel Committee convened four times during the financial year 2015. One of its tasks is to

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prepare decisions relating to the composition of the Board of Management. In one case, the Personnel
Committee gave its approval for a member of the Board of Management to accept a mandate for
membership of the supervisory board of a non-BMW Group entity.

The Nomination Committee convened twice in 2015 to deliberate on successor planning for mandates of
the shareholders representatives and adopt recommendations for proposals for election at the 2015 and
2016 Annual General Meetings, taking the composition objectives stipulated by the Supervisory Board
into due account.

The statutory Mediation Committee was not required to convene during the financial year 2015.

Composition and organisation of the Board of Management

After the Annual General Meeting held on 13 May 2015, I resigned from the Board of Management as
previously announced and Harald Krger took over as Chairman of the Board of Management. The
Supervisory Board had previously appointed Oliver Zipse as member of the Board of Management for the
first time with effect from the end of the Annual General Meeting. Mr Zipse has worked for the BMW
Group since 1991, most recently as head of Group Planning and Product Strategy. He took over
responsibility for Production from Harald Krger. In the financial year 2015, the Supervisory Board
resolved to extend the mandate of one Board of Management member.

Composition of the Supervisory Board, the Presiding Board and Supervisory Board Committees

In order to facilitate the generational change at the top of the Board of Management and the Supervisory
Board, which he both planned and personally supported, Professor Joachim Milberg resigned from the
Supervisory Board immediately after the 2015 Annual General Meeting. As previously announced, he will
be playing a leading role in the worldwide social engagement and philanthropic work of BMW AG, in
particular as Chairman of the Board of Trustees of the BMW Foundation Herbert Quandt. Professor
Milberg has faithfully served and had a major influence on the BMW Group over a period of many years,
beginning in 1993, first as member and then as Chairman of the Board of Management from 1999. As
from 2002 he served firstly as member and finally, from 2005, as Chairman of the Supervisory Board. The
Supervisory Board wishes to take this opportunity to express its great respect for, and appreciation of,
Professor Milbergs achievements.

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Wolfgang Mayrhuber also resigned from the Supervisory Board at his own request at the end of the 2015
Annual General Meeting. The Supervisory Board wishes to thank Mr Mayrhuber for his more than ten
years of valuable, trusted cooperation.

Simone Menne was elected to the Supervisory Board as new shareholder representative. Professor Dr
Henning Kagermann was re-elected as member of the Supervisory Board at the Annual General Meeting
in 2015.

After my election to the Supervisory Board by the Annual General Meeting in 2015, the Supervisory
Board members elected me as their new Chairman. In this capacity, and in accordance with the relevant
terms of reference, I remained Chairman of the Personnel and Nomination Committees. I was also
elected member of the Audit Committee. The Corporate Governance Report contains a summary of the
composition of the Supervisory Board and its committees.

Examination of financial statements and the profit distribution proposal

KPMG AG Wirtschaftsprfungsgesellschaft conducted a review of the abridged Interim Group Financial

Statements and Interim Group Management Report for the six-month period ended 30 June 2015. The
results of the review were presented to the Audit Committee by representatives of KPMG AG
Wirtschaftsprfungsgesellschaft. No issues were identified that might indicate that the abridged Interim
Group Financial Statements and Interim Group Management Report had not been prepared, in all
material respects, in accordance with the applicable provisions.

The Group and Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the
year ended 31 December 2015 and the Combined Management Report as authorised for issue by the
Board of Management on 18 February 2016 were audited by KPMG AG
Wirtschaftsprfungsgesellschaft and given an unqualified audit opinion.

The Financial Statements and the Combined Management Report, the long-form audit reports of the
external auditors and the Board of Managements profit distribution proposal were made available to all
members of the Supervisory Board in a timely manner.

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In a first step, the Audit Committee dutifully examined and discussed these documents at a meeting held
on 25 February 2016. The Supervisory Board subsequently examined the relevant drafts of the Board of
Management at its meeting on 9 March 2016, after hearing the committee chairmans report on the
meeting of the Audit Committee. In both meetings, the Board of Management gave a detailed explanation
of the financial reports it had prepared. Representatives of the external auditors attended both meetings,
reported on significant findings and answered any additional questions raised by the members of the
Supervisory Board. They also confirmed that the risk management system established by the Board of
Management is capable of identifying any events or developments that might impair the going-concern
status of the Company and that no material weaknesses in the internal control system and risk
management system were found with regard to the financial reporting process. Similarly, they confirmed
that they had not identified any facts in the course of their audit work that were inconsistent with the
contents of the Declaration of Compliance issued jointly by the two boards.

Based on thorough examinations at both Audit Committee and full Supervisory Board level, the
Supervisory Board concurred with the results of the external audit. In accordance with the conclusion
reached after the examination by the Audit Committee and Supervisory Board, no objections were raised.
The Group and Company Financial Statements of Bayerische Motoren Werke Aktiengesellschaft for the
financial year 2015 prepared by the Board of Management were approved at the Supervisory Meeting
held on 9 March 2016. The separate financial statements have therefore been adopted.

The Supervisory Board also examined the proposal of the Board of Management to use the
unappropriated profit to pay an increased dividend of 3.20 per share of common stock and 3.22 per
share of non-voting preferred stock. The Supervisory Board considers the proposal appropriate and
therefore concurs with it.

Expression of appreciation by the Supervisory Board The financial year 2015 has again been a record
year for the BMW Group. The Supervisory Board wishes to thank the members of the Board of
Management and the entire staff of the BMW Group worldwide for their outstanding work and concerted
performance.

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Locations And Subsidiaries

Locations And Subsidiaries

LOCATIONS AND SUBSIDIARIES

Head Office
Bayerische Motoren Werke AG (BMW Group)
Petuelring 130
80788 Munich
DEU
Phone:49 89 382 0
https://www.bmwgroup.com/en

Other Locations and Subsidiaries

BMW (South Africa) Pty Ltd.
1 Bavaria Str
Randjiesfontein
Midrand
ZAF
http://http://www.bmw.co.za/

BMW Australia Ltd.

783 Springvale Road
Mulgrave
Victoria 3170
AUS
http://http://www.bmw.com.au

BMW Automotive Finance (China) Co. LTD

22F Tower B
Gateway Plaza Number 18 Xia Guangli
North Road East Third Ring
Chaoyang District
CHN
http://http://www.bmw.com.cn

BMW Financial Services Mexico, S. A. de C. V.,

SOFOM, E.N.R
Paseo de los Tamarindos 100-502
Bosques de las Lomas
CP 05120
Delegacion Cuajimalpa
MEX
http://http://www.bmwfs.com.mx

BMW France S.A.

3 Avenue Ampere
78886 Saint Quentin en Yvelines
FRA
http://www.bmw.fr

BMW India
DLF Cyber City
Phase II Building Number 8
Tower B 7th Floor
Gurgaon
Haryana 122 002
IND
Phone:91 124 4566 600
Fax:91 124 4566 601
www.bmw.in

BMW Manufacturing LLC

1400 Highway 101
South Greer
South Carolina 29651
USA
http://http://www.bmwusfactory.com

BMW New Zealand Ltd.

7-15 Great South Road
Auckland 1051
NZL
http://http://www.bmw.co.nz/

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Locations And Subsidiaries

BMW of North America, LLC

300 Chestnut Ridge Road
Woodcliff Lake
New Jersey 07677 7731
USA
http://http://www.bmwusa.com

Bayerische Motoren Werke AG (BMW Group)

MarketLine

Rolls-Royce Motor Cars Limited

The Drive
Westhampnett
Chichester
West Sussex PO18 0SH
GBR
http://www.rollsroycemotorcars.com

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