BMW Group Still Showing Steady Growth After

MUNICH, Germany - The BMW Group continued to develop successfully in the third quarter 2001. In the first nine months of the year 2001, profit from ordinary activities reached euro 2,267 million, which is 72.4 percent above the corresponding figure for the previous year. In the third quarter 2001, the BMW Group's profit from ordinary activities was euro 567 million, which is 4.9% (euro 29 million) below the same quarter last year.

Total sales for the Group in the third quarter 2001 reached euro 8,196 million. In comparison with the same period in the previous year, this represents an increase of 9.8%. Overall, the growth rate for the first three quarters 2001 is 7.1% to euro 28,169 million. Excluding Rover sales from the first half year 2000 (euro 3,500 million), the rate of increase is 23.6%.

Net Profit in the third quarter, at euro 315 million, is 29.4% below the level of the corresponding quarter last year. The first nine months of the 2001 financial year recorded an overall net profit of euro 1,249 million, which is an increase of 63.3%.

In the current financial year, on the basis of these positive business developments, the BMW Group has increased the number of its workforce - especially staff in production, development and sales - worldwide by over 3,000 to date. Altogether, 96,865 associates were employed in the BMW Group as of 30 September 2001.

Product offensive: several new products launched The BMW Group pushed forward with its product offensive in the third quarter. The MINI was launched very successfully in the UK in July, followed by the rest of Europe at the beginning of September. Initial sales figures confirm the positive expectations. The model update of the BMW 3 Series was also successfully introduced in September. The new BMW 7 Series and the BMW X5 4.6is were presented to the public at the International Motor Show in Frankfurt. In addition, the new F650 CS Scarver motorcycle was also premiered in Frankfurt.

Targets for the 2001 financial year will be met

On the basis of information available to date, the economic effect of the terrorist attacks in the USA will be manageable for the BMW Group. Business is expected to continue to progress positively in the fourth quarter 2001, with sales volume forecast at over 900,000 BMW and MINI automobiles for the full year. This represents a sales volume increase of over 9% compared to the previous year.

``This confirms the belief that the excellent result achieved by the BMW Automobiles segment in 2000 will be exceeded, even during a phase of increased expenditure for the on-going product and market offensive'', stated Professor Dr.-Ing. Joachim Milberg, Chairman of the Board of Management of BMW AG. At Group level, the return on sales for 2001 will be over 6 percent, he continued.

Further increase in sales in the 3rd quarter

Sales and production in the BMW Automobiles sector are continuing their steady growth. In the third quarter 2001, sales reached 211,995 automobiles in total, which is 8.2% above the previous year's level. 207,321 BMW automobiles were delivered to customers - an increase of 5.8% over the same quarter last year. On top of this 4,674 MINI automobiles were delivered. In the first three quarters of 2001 - including the MINI brand - a total of 671,830 vehicles were sold (plus 8.9%), which is a substantial increase in worldwide deliveries to customers compared with the same period last year.

Steady sales increase in the markets

With 181,917 deliveries to customers in the first nine months of the 2001 financial year, Germany continues to be the most important market for BMW vehicles. The level of the previous year was almost maintained in the face of a declining overall market (-0.8%).

In the rest of Europe, 5.6% more vehicles were sold from January to September. With an increase of 160,484 or 18.7% in comparison with the first nine months of 2000, the USA continued the upward trend of the last ten years. Almost all the other markets also recorded clear increases in sales.

Production increases still further

The high level of the third quarter 2000 was outstripped from July to September 2001 with 213,333 automobiles produced, including 12,290 of the MINI range, which is an increase of 6.2%.

Altogether in the first three quarters of 2001, production rose by 11.4% to 685,039 automobiles, including 14,607 of the MINI range manufactured at the new plant in Oxford.

Positive developments in the BMW Automobiles segment

The increase in sales in the BMW Automobiles segment also continued in the third quarter 2001. At euro 7,228 million, sales were 10.5% up on the third quarter 2000. Altogether, the first three quarters of the year 2001 recorded an increase of 16.6% to a total of euro 24,659 million. As in the first two quarters of 2001, this above-average growth is attributable to the larger share of models with more powerful engines and a higher level of equipment.

Profit from ordinary activities in the BMW Automobiles segment in the third quarter 2001 is, at euro 418 million, 26.0% lower than in the same quarter last year. This is a reflection - as previously announced - of the effects of the ongoing product and market offensive, the costs of the BMW 7 Series model change and the market launch of the MINI. In the first nine months of the 2001 financial year, profit from ordinary activities reached euro 1,995 million, which is 7.5% above the relevant comparable level last year.

BMW motorcycles continue to be successful

After the good results from the first half year, motorcycle sales once again reached a new peak in the third quarter 2001. The figure of 19,416 units delivered was 15.8% up on the comparable figure for the previous year.

From January to September 2001, 69,533 motorcycles were delivered to customers, which is a 11.4% rise compared with the same period last year. As in the first half year, the BMW motorcycles segment was also able to expand its position in almost all markets in the third quarter 2001. In the third quarter, 3,070 BMW C1s - the alternative method of transport for cities and urban areas - were delivered to customers. This means that total deliveries in the first three quarters reached 8,890 vehicles.

Total sales in the BMW Motorcycles segment rose in the third quarter 2001 to euro 246 million, which was 20.6% higher than in the same quarter last year. Taking the first three quarters of 2001 together, this thus gives an increase of 16.2% to euro 873 million - a new record on a nine-month basis.

Because of the normal seasonal fluctuations in the motorcycle business, profit from ordinary activities in the third quarter 2001 was euro -5 million. This was 16.7%, or euro 1 million, up on the previous year.

In the first nine months of the 2001 financial year, profit from ordinary activities rose to euro 54 million, which is 28.6% higher than in the corresponding period last year.

Financial services: expansion of strategic business areas

In the third quarter 2001, the Financial Services segment continued to expand the strategic business areas of fleet management, multibrand financing and direct banking in line with plan.

As of 30 September 2001, the volume of business was euro 23.9 billion. This was - primarily because of the loss of Rover/Land Rover vehicle financing - euro 1.2 billion, or 4.9%, lower than at the end of September 2000.

The deposit business reached a volume of euro 2.3 billion as of 30 September 2001, an increase of around euro 500 million, or 35.3%, over the same period last year.

In the third quarter 2001, profit from ordinary activities of BMW Financial Services fell by 2.8% compared with the previous year, to euro 106 million. With euro 314 million in total, there was an increase for the first nine months of 2001 of 5.0% in comparison with the same period last year.

The complete half year report can be accessed online at http://www.press.bmwgroup.com or in the Press department.

The BMW Group: an overview

3rd quarter 3rd quarter Change Units/million euro 2001 2000

Vehicle production Automobiles1 213,333 200,805 6.2% Motorcycles2 17,966 14,158 26.9% Vehicle deliveries Automobiles3 211,995 195,994 8.2% Motorcycles4 19,416 16,766 15.8%

Workforce at the end of quarter5 96,865 93,551 3.5%

Cash flow 729 1,029 -29.2%

Sales 8,196 7,465 9.8% Profit from ordinary activities 567 596 -4.9% Thereof: BMW Automobiles 418 565 -26.0% BMW Motorcycles -5 -6 16.7% Financial Services 106 109 -2.8% Miscellaneous, consolidations 48 -72 Taxes on profit 252 150 68.0% Net Profit 315 446 -29.4% DVFA/SG earnings per share 0.54 0.67 -19.4%

1 includes 12,290 MINI vehicles in the 3rd quarter 2001 2 excludes 1,194 C1 in the 3rd quarter 2001 (3rd quarter 2000: 5,617) 3 includes 4,674 MINI vehicles in the 3rd quarter 2001 4 excludes 3.070 C1 in the 3rd quarter 2001 (3rd quarter 2000: 2.067) 5 after adjusting for the disposal of the supplier plant Powertrain Ltd., Bracknell, the comparable number of employees at 30 September 2000 was 91,911 is comparable

1 January 1 January Change - 30 Sept. - 30 Sept. Units/million euro 2001 2000

Vehicle production Automobiles1,2 685,039 614,951 11.4% Motorcycles3 71,447 57,876 23.4% Deliveries to customers Automobiles4,5 671,830 616,949 8.9% Motorcycles6 69,533 62,392 11.4%

Workforce at the end of quarter7 96,865 93,551 3.5%

Cash flow 2,729 2,233 22.2%

Sales 28,169 26,290 7.1% Profit from ordinary activities 2,267 1,315 72.4% Thereof: BMW Automobiles 1,995 1,855 7.5% Rover Automobiles -762 BMW Motorcycles 54 42 28.6% Financial Services 314 299 5.0% Miscellaneous, consolidations -96 -119 19.3% Taxes on profit8 -1,018 -550 85.1% Net Profit 1,249 765 63.3% DVFA/SG earnings per share 2.06 1.18 74.6%

1 excludes 192,236 Rover/Land Rover vehicles for the six month period to 30.6.2000 2 includes 14,607 MINI vehicles for the nine month period to 30.9.2001 3 excludes 8,934 C1 for the nine month period to 30.9.2001 (15,563 for the nine month period to 30.9.2000) 4 excludes 189,753 Rover/Land Rover vehicles for the six month period to 30.6.2000 5 incl. 4,674 MINI vehicles for the nine month period to 30.9.2001 6 excludes 8,890 C1 for the nine month period to 30.9.2001 (5,716 for the nine month period to 30.9.2000) 7 after adjusting for the disposal of the supplier plant Powertrain Ltd., Bracknell, the comparable number of employees at 30 September 2000 was 91,911 8 thereof euro 181 million euro recorded in the first quarter 2001 as a result of the tax reform in Germany (deferred taxes)

SOURCE: The BMW Group