BMW NA Chairman Encourages Collaboration - And Competition - For Automotive Industry Success

Orlando, FL - February 14, 2006... In his keynote address to the National Automobile Dealers Association on Saturday, Tom Purves, Chairman and CEO of BMW in the U.S., encouraged auto manufacturers and dealers to work together on areas of mutual concern to foster greater understanding and acceptance of the industry, and better business performance. Purves acknowledged the challenging environment faced by many automotive companies, and the ripple effect that difficult business conditions have on employees, dealers, and suppliers - in fact the entire industry. The solution, he noted, may lie within the industry's strengths - excellent retail career opportunities, strong business values and technological innovation.

"These are areas of vitality that may not be apparent to the causal outside observer and opportunities that can contribute to better business results, both collectively and individually. I believe that people, business values and technology can serve as bridges to the future," Purves said.

One of the common opportunities for the auto industry, said Purves, lies in retail careers at dealerships. He cited a recent survey showing more than 104,000 retail career opportunities available at franchise automobile dealers in the United States today as evidence of that vitality. These jobs are more sophisticated and better paying than those available in the service economy, he noted. They cover a wide variety of positions and attract people with diverse skills, and they offer ongoing training. "These are non-cyclical jobs that cannot be outsourced overseas."

Having begun his career as a technical apprentice at Rolls-Royce, the BMW CEO made special mention of the importance of promoting technical careers at dealerships, saying it is an area of growing need and great opportunity. He referred to a $2.2 million grant from the U.S. Department of Labor as part of its High Growth Job Training Initiative that will be used to provide on-line technical training nationwide, beginning next year.

Equally important to the advancement of retail careers, according to Purves, is image enhancement: positioning dealerships as desirable, challenging and rewarding places to build long-term careers. He urged his audience to work with groups like Automotive Youth Educational Systems (AYES) to convince parents, educators and young people to do away with lingering stereotypes and take a fresh look at technical careers. Purves is also the current chairman of AYES.

Good business values are essential to eliminating outdated negative stereotypes about automobile dealerships. Here, Purves pointed to a separate survey showing levels of consumer satisfaction and trust highest among consumers with current dealership experiences compared to those who have not recently shopped for a car.

"Dealers and manufacturers need to actively build consumer confidence, especially at a time when some people might be skeptical about the long term vitality of the industry," he said. "The success and longevity of auto dealerships is based on sound business practices and values."

Technology is the third bridge named by Purves. Auto manufacturers are intensely committed to the future of the industry, and are meeting the challenge and opportunity to find innovative solutions regarding design, performance, product quality, energy and clean air. To achieve this result, he said, will require a rate of technical innovation in the next ten years that will outpace that which we have experienced in the last several decades combined. In fact, auto companies competing in the U.S. are projected to spend more than $14 billion on research and development this year alone - a larger investment than the pharmaceutical industry.

Purves believes that the best results of these efforts will come when the industry is allowed to pursue multiple technologies at the same time, instead of being restricted by government mandates that might be right for the moment. "The winners will be the ones who respond to the public's demand for a wide choice of clear, safe and fuel-efficient vehicles that match the characteristics expected from their brands," he maintained. "Everyone will benefit when the industry collaborates and then vigorously competes to win a competitive advantage."

The BMW Group will continue to be a passionate player in the industry, vowed Purves. BMW Group was the leading luxury automobile brand in the U.S. in 2005, with more than 300,000 vehicles sold - a new record. BMW is also the leading auto exporter of vehicles made in the U.S. to non-NAFTA markets.

Purves likened the company's competitive strategy to that of an elite athlete vying for an individual title: "You have to be aware of what the competition is doing because you respect their abilities. You must also be confident that the margin of victory comes from understanding your own game, and the playing within yourself to maximize your strengths."