Morning Reads: 5 November 2008

[mika]

Happy Birthday

It has been in the works for over a year. They have been running off the old version that even included a link to MV Agusta ÔÇô The new Husqvarna website

Spend some time looking at the new site. There are links to new 2009 models and news from out Italian sister.

Chris Pfeiffer
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hellforleathermagazine.comÔÇÖs take on the BMW Lo Rider
- and on ÔÇô
Husqvarna SMQ

Ducati.com: Ducati introduces its new logo


SoloMoto is a great source for the EICMA

Surprise! New Bandit GSF 650 N / S

[url= http://translate.google.com/translate?u=http%3A//www2.solomoto30.com/noticia.asp%3Fref%3D22463&hl=en&langpair=auto|en&tbb=1&ie=iso-8859-1]Husqvarna SMQ Concept

KTM 990 models and RC 8

Honda CB600F Hornet


Bring your translator to ÔÇô motociclismo.itÔÇÖs ÔÇô and their Speciale Salone di Milano


motorcyclenews.com: Milan Show: Bimota DB7 Oronero


Talk about your fun sounding niche toy project
thekneeslider.com: WorldÔÇÖs fastest 50cc motorcycle project


motomag.com: Moto Morini 1200 Granpasso


motoblog.it: Concept Aprilia Mana X


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Schummi Watch
crash.net: Schumacher tests Ducati and Yamaha (He was also around recent tests of the S1000RR ÔÇô street version but not seen on it)


Mercedes-Benz TV on Lewis Hamilton
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bimmerfile.com: BMW Ag cancels production version of the CS Concept


motoring.co.za: McLaren to challenge Ferrari off the track


Sorry BMW but I have wanted one of these for a long time.
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worldofbmw.com: BMW Motorrad at the EICMA Show 2008


In case you missed the news on the forum yesterday-
worldofbmw.com: BMW Motorrad Motorsport announces 2009 rider line-up.


ROLLS-ROYCE CONTINUES EXPANSION IN GREATER CHINA

31.10.2008
Download:


A new Rolls-Royce showroom was officially opened today in Shenzhen, Southern China by Jenny Zheng, Rolls-Royce Motor CarsÔÇÖ General Manager for Greater China.
The new showroom, the seventh for Rolls-Royce in Greater China, is conveniently located at the Tian An Cyber Park in the Central Futian District of Shenzhen, a major commercial centre. It is managed by SCAS Investment Group Co. Ltd.

Speaking at the showroom grand opening, Zheng said, ÔÇ£Rolls-Royce is on course to complete its expansion plan in Greater China. Only last month, we opened a new showroom in Hangzhou and expect to open another in Ningbo within the next few months.ÔÇØ

Other Rolls-Royce showrooms in Greater China are located at Beijing, Chengdu, Guangzhou, Hong Kong and Shanghai.

At the opening, Zheng also unveiled the new Rolls-Royce Phantom Coup?®, the first time the two-door, four-seater grand tourer has been shown in Shenzhen. The car is the most driver-oriented of the Rolls-Royce Phantom family, combining meticulous design, craftsmanship and advanced engineering which has led to more new buyers embracing the brand ÔÇô nearly two-thirds of Coup?® customers worldwide have not owned a Rolls-Royce before.

Also attending the ceremony were key executives from SCAS Investment Group Co. Ltd.

In 2008, Rolls-Royce has a four model line-up, Phantom, Phantom Extended Wheelbase, Phantom Drophead Coup?® and Phantom Coup?®. Phantom remains the best-selling super luxury car in the world and a new Rolls Royce model series, RR4, will be launched in 2010.

Stuff


Outside of the motorcycle world not much stuff has happened since I last posted

Packers Blog ÔÇô jsonline.com
Packers.com ÔÇô News from the football shrine
Green Bay Post Gazette: Packer News, Commentary


Offical site of the Premier League


GasBuddy.com has gas temperature maps intended to let you see what gas prices are around the US and Canada. Areas are color coded according to the reported local average price for regular unleaded gasoline.
US
Canada


2009 Dakar Rally


Wonderings

The MotherShip News and speeches from the BMW board leadership about the 3Q results follow the main post for the Morning Reads.

I donÔÇÖt like Kool Aid. Lemonade yes Kool Aid no.

The news from BMW is exciting. The long expected F800R is here and bodes well for helping sales. The Lo Rider Concept is very interesting and may offer hope to break into new market segments. BMW Motorrad Motorsports made a huge announcement about riders for the G450X WEC efforts for 2009. They are calling it Dream Team on the Motorsports web site.

This has to be exciting for all of us in the Motorrad camp of BMW. At a time when things are being ÔÇÿmanagedÔÇÖ, cut or explained in terms of strategy Number ONE to justify them, BMW Motorrad and Husqvarna are doing new things.

Did you notice something missing in the motorcycle announcements? No odd suspension. It is no surprise with the F800R, but the Lo Rider has BIG muscular upside down forks not a lever suspension of any kind. Has the special front suspension era for BMW come to an end for new models?

It is time to think through what the rumor mill had us possibly prepared for and what we did not see from BMW.

No scooter: It has been rumored before. Pietr de Waal from BMW Motorrad NA alluded to it being in the works. Scooter friendly Italy could have been the place to release it. Perhaps it was not far enough through the development pipe to make it out in the current conditions. Alternately is it being delayed in anticipation of the demand for F800R and GS. Any way you read the tea leaves it is a no show.

S1000RR ÔÇô Street: Speaking of no shows where is the street version of this? Was the rumor from Motoblog.it correct? Have internal cost savings issues delayed the delivery of the street model for a presentation at Milan. Will this mean a delay in the appearance in WSBK if the FIM does not grant a waiver?

Finally what I have secretly been hoping for is the announcement of a factory sponsored Dakar team. I wondered with the F800GS in the GS Trophy Challenge might be the door opener for that model. I also have wondered about a G450X based challenge. There is still a little bit of time for such a thing to happen, but not very much. The competitor list has not been published yet by the rally organizers. Maybe BMW hasnÔÇÖt opened its mail to find out the application was accepted.


Bike Candy

Is the innovative front suspension gone for future BMWÔÇÖs? I like forks.

THE END

 

[mika]

Statement by Dr. Norbert Reithofer


Chairman of the Board of Management of BMW AG
Conference Call Interim Report to September, 30th
2008

4 November 2008

Ladies and Gentlemen,
Once again: I would like to welcome you to our telephone conference.
The international financial crisis has gained further momentum in the third
quarter and has now hit the real economy with full force.
However, what is important:

The BMW Group is prepared to meet these challenges head on.

The BMW Group remains a strong performing company with a solid
foundation.

These qualities enable us to weather effectively such stormy conditions
and continue to invest in our future.

Despite the fact that this situation exceeds anything we have ever seen before, I
would like to emphasize here:

This is not the first challenging situation for our company. Just think of the oil
crisis in 1973, the weak market during 1992 and 1993, or the Rover sale.

Times like these have made our company what it is today. After such challenging
times, there is a period of renewed growth.

Today, however, we have a major advantage:

We have initiated specific actions early on. And these measures are set to pay off
in the short and long term, making us a leaner, more efficient and more effective
company.

Today, I would like to concentrate on the following:
1. Given the current situation, what are BMW GroupÔÇÖs targets?
2. What actions are we taking right now?
3. Which solutions do we offer in the field of individual mobility for the future
that will help us ensure our long-term success and growth?

First: What are our targets?
In light of the tense situation on the global auto markets, the business
development for the year 2008 can not be forecast at present. But one thing is
clear:

Group sales will not exceed last yearÔÇÖs record level.
Two of our three premium brands - MINI and Rolls-Royce - are growing.
Accordingly, we will not be able to reach the planned return on sales of 4
percent for the Group and an EBIT of close to 4 percent in the
automobile segment. We might have to increase risk provisions once
more in the fourth quarter to prepare for a more long-term weakness in
the market.

Fact is: We will achieve a positive Group result for the business year
2008. Nevertheless, at present we are not able to give you an exact
figure.

Now letÔÇÖs turn to our long-term targets:
Our goal to achieve a return on sales of 6 percent on Group level in 2010
remains unchanged. EBIT in the automobile segment is set to be at least
6 percent - obviously based on a market upturn.

We also confirm our long-term strategic targets for the year 2012 which
have been determined by our strategy Number ONE. We are talking
about a return on sales of 8 to 10 percent and a return on capital
employed of over 26 percent in the automobile segment. Our efforts to
enhance efficiency and effectiveness are starting to take hold. We have
an extremely attractive product portfolio for the next few years ÔÇö also
with regard to new drive systems.

So where do we stand today, following the first nine months of the year?

As per September, we increased sales by 1.7 percent. In a declining
market environment, we managed to sell more than 1.1 million cars
worldwide - more than any of our competitors. This shows how popular
our products are - thanks to their innovative technologies and high
quality.

Despite the enormous additional burdens arising from the current
economic situation and hesitant consumer spending, Group revenues
stood at Ôé¼ 40.4 billion - matching last yearÔÇÖs high level. Adjusted for
currency changes, Group revenues would have risen by 5.1 percent.

External factors had a significant negative impact on our pre-tax profit on
Group level. In the first nine months of the year, we recorded a decline by
43.3 percent to Ôé¼ 1.52 billion year on year.

Mr. Eichiner will tell you more about the business development in the third
quarter later.

Now letÔÇÖs turn to my second point:

What actions are we taking right now?

We are cutting costs:

Between June and September, our research and development
expenditure decreased 5.1 percent from last yearÔÇöwithout jeopardizing
our lead in innovation. We are today much more efficient. We also
invested heavily in new technologies at an earlier stage.

We also achieved a considerable reduction in marketing and
administrative costs - adjusted for the additional expenses for employee
compensation payments. This applies both to the third quarter and the
first nine months of this year.

In total, we improved our fixed-cost position compared with last year.
In addition, we have set up specific activities to cut HR expenses.
At present, we are negotiating with the employee representatives about
voluntary fringe benefits exceeding general pay. Our goal is to establish a
stronger tie between employeesÔÇÖ pay and the companyÔÇÖs overall performance.
The following initial results have been achieved:

Due to the lower operating earnings, we will reduce the profit sharing
bonus for the business year 2008 from the 2007 level. In the future,
calculation of these voluntary benefits will be based more strongly on
performance indicators. This will add a significant contribution to our
earnings, and therefore, greater entrepreneurial spirit will continue to pay
off for our associates. From 2009 onwards, a new calculation model will
also be applied to the Christmas bonus.

Our current personnel reductions are proceeding as planned.

Compared to the end of 2007, we have reduced BMW Group headcount by
3,689 employees.

This figure includes 1,778 Cirquent staff. As previously announced, we sold 73
percent of our shares in the IT consulting firm Cirquent to Japan-based NTT
Data.

The number of termination agreements concluded by the end of September
stands at almost 2,700, thereof 2,200 in Germany. 2,400 of the 2,700
employees will have left the company by the end of the year.

The previously announced personnel reduction of 3,100 permanent staff and
5,000 temporary employees will be reached by the end of the year. This sum
does not include Cirquent staff.

Despite the difficult situation, we remain committed to our social responsibility
principles.

As one of the worldÔÇÖs most admired companies, we will continue to offer highquality
training to young people.

In 2009, we will hire more than 1,100 apprentices, 1,080 of them in Germany.
This is a clear investment in the future. It is also our commitment in providing
skilled labor for the community.

We have also taken action in the production early on.

Customers are buying fewer cars - and this is true for all market segments. It
makes absolutely no sense to produce for stock only instead we are taking quick
and effective actions in this area:

About 15,000 cars from the United States being reallocated to other
markets with stronger profit margins.

As you know, we planned to reduce our production by 25,000 units. We
find it necessary to cut at least 40,000 units more from our initial
production plan for 2008. Our highly flexible production network with its
flexible working time accounts gives us room to maneuver.

All these activities show that profitability is our top priority. Earnings are more
important than a mere growth in numbers.

All our actions are based on careful consideration and foresight. It does not make
sense to build up stocks which are bound to reduce our revenues later on. We
also have a commitment to our dealerships and the well-being of the company.
But there is another aspect towards improving profitability: We are reviewing all
product projects again.

And we thus have decided that there will not be a series model of the Concept
CS.

A recent analysis has shown that:

First: Despite the great feedback this car has achieved so far, it does not
match our ambitious profitability targets.

Second: Our three premium brands have a strong brand image all around
the world. This has been proven, for instance, by the latest Brand index
analysis. So for the time being, we can do without this ÔÇ£brand shaperÔÇØ
since we have many others in our portfolio.

Third and most important is that we want to focus our resources primarily
on future projects and new technologies. In other words: Currently, our
top priorities are EfficientDynamics and project i.

Our financial services business has also responded to the changing business
situation:

We have taken out additional provisions against residual value and credit
risks in the first and second quarters of the year.

And we have shifted our focus from leasing to financing.
But fact remains:

Customers will continue to demand leasing offers. We stand to benefit from
EfficientDynamics in the medium term. For when these cars return, the residual
values of these pre-owned cars will prove more stable than any of our
competitorsÔÇÖ cars - thanks to our technological lead.

As you can see, we are taking action and at the same time, we are setting the
course for our future success.

This brings me to my third point:
Which solutions for individual mobility do we offer to secure our future?

Our priorities are clear:

First: Our competitive advantage in the field of efficient premium vehicles
continues to pay off:

o In Germany, our sales volume rose by 0.6 percent for BMW and
7.8 percent for MINI, compared with the third quarter of 2007.

o In France, we posted an increase of 5 percent for BMW and 12
percent for MINI - despite or maybe because of increasingly strict
carbon regulations.

o In China, we also grew during the third quarter - by 35 percent for
BMW and 24 percent for MINI.

Second: We have a highly attractive model portfolio that continues to set
trends while meeting our customersÔÇÖ ever-increasing demands:
o On September 20, we launched the revised BMW 3 Series
Sedan and the 3 Series Touring.

o The BMW X6 has been available for half a year now. This car is
exceeding all expectations. Demand is high, particularly in the US,
in Italy, Germany and the Middle East. It underlines BMWÔÇÖs ability
to create a new segment successfully.

o The new BMW 7 Series is due out in Europe this month. Initial
feedback at the international media presentation in Dresden was
more than positive - outstanding.

And let me add a third point: We are offering new technologies and drive
concepts:

o In 2009, two BMW hybrid models will reach series maturity - the
BMW 7 Series and the X6.

o At the Paris Motor Show, we presented the BMW Concept X1
and the MINI Crossover Concept - two cars that demonstrate
how we will expand our model portfolio in the future.

o And at the Los Angeles Auto Show in mid-November, we are
going to present the electric MINI with a reach of 240 kilometers
and a charging time of only two to two and a half hours. The initial
500 MINI Es will be delivered to the US market. However, we are
currently evaluating whether to launch the MINI E in Europe as
well.

Another important step is our so-called Mega City Car that will be
offered with two different drive systems - an all-electric
powertrain and a highly efficient combustion engine.

Ladies and Gentlemen -
We cannot foresee the full extent of the international financial crisis and its
duration yet.

However, all of us need to remain calm and not constantly fuel peopleÔÇÖs fears
even further.

There is also a lot of debate about what governments should do to improve the
situation.

As we see it, the top priority should be taking a few crucial decisions - and doing
so quickly:

Number one: To define realistic carbon requirements for Europe with a
timeframe that can be synchronized with product lifecycles.

Number two, and this applies to Germany in particular: To determine
reliable conditions for a carbon-based motor tax. This move could calm
down the market and strengthen customer confidence.

And number three: To strengthen instruments that promote research
and the development of innovations on the national and European levels.
To this end, it will be crucial to avoid distorting competition and to focus
on technologies for sustainable individual mobility.

Strategy Number ONE is our compass to the year 2020.
We remain confident that:

We will achieve a positive Group result in 2008 despite the challenging
market conditions.

We are making progress in all areas concerning our Strategy. And we
have improved our performance on an operational level.

We remain committed to our long term targets for 2010 and 2012.
We have proved time and again that we are a strong company. In the current
situation, we have shown once more that we have the right measures in place
and that we are acting resolutely.

In the long term, this will clearly benefit the BMW Group.
Thank you.

 

[mika]

Statement by Dr. Friedrich Eichiner

Member of the Board of Management of BMW AG,
Corporate and Brand Development,
Conference Call Interim Report to 30 September 2008
4 November 2008

Good Morning Ladies and Gentlemen,
As Norbert Reithofer already explained, our Strategy Number ONE is clearly
paying off.

In the course of the business year 2008, we improved our operating
performance and increased our efficiency ÔÇô this can be clearly seen in the
reduction of our R&D-ratio.

However, this positive business trend is being overshadowed by negative
external factors.

The financial crisis is increasingly affecting the real economy and the
automotive sector in particular.

We are feeling the effects of this in the new car business as customers are
holding back. This applies especially to our major high-volume markets,
namely the USA and Europe.

And it is making itself felt in the pre-owned car business. Residual values are
coming under mounting pressure above all in Europe. In consequence, we
had to increase the risk provision once again. It now amounts to over a billion
euros.

Naturally, these developments are reflected in our current performance figures:

Group profit before tax after the first nine months was 43.3 per cent lower
year on year.

The return on sales was 3.8 per cent.

However, I believe the following describes a more realistic picture of what we are
actually capable of:

This year, we have increased our risk provision by a total of 1.037 billion euros
so far.

Moreover, we shouldered a one-off expense for personnel-related measures
of 258 million euros in the first three quarters.

In addition, the profit earned in the same period last year included a positive,
one-off Rolls-Royce effect of 66 million euros.

Net of these three factors, Group profit before tax was not down 43 per cent.
Instead, it was up nearly eight per cent, or 201 million euros.

This would correspond to a return on sales of 7.0 per cent on Group level.
So we continue to be a strong performing company.

Nevertheless, we are calmly taking a number of actions in order to react sensibly
to the current situation and emerge from this crisis even stronger. Norbert
Reithofer has already given you an overview of our activities.

I will revisit this issue later. Now let me give you some details concerning the
latest interim financial statements and our outlook.

As in the first six months, the increase in the risk provision for residual values and
credit defaults was the single-largest negative factor in the third quarter. We
mentioned back in August that we were still watching over the situation with
great care. And that we would increase the provision if necessary.

The situation in the USA hasnÔÇÖt improved significantly since then. And it has
actually become even worse in Europe ÔÇô above all in Germany and the UK.
This is why we increased our risk provisions by another 342 million euros in the
third quarter.

232 million euros are attributable to residual value losses

and 110 million euros are allocable to credit risks.
This brings the total provisions accrued in the first nine months of this financial
year to the 1.037 billion euros I mentioned earlier.

We may have to raise provisions by a mid-range triple-digit million euro figure in
the fourth quarter. This will depend on how the residual values continue to
develop. We will thus continue to monitor the situation very closely.
That was the current state of our risk provisions.

As I said earlier, currency effects, raw material prices and staff cuts are additional
negative factors. Although they have not deteriorated more than expected since
the first two quarters of 2008, they have become worse compared with last year:
In the third quarter, expenses incurred to reduce the workforce amounted to
151 million euros. This brings us to the 258 million euros as of September I
mentioned in opening.

As often stated in the past, we estimate that foreign exchange rates will have
an adverse effect of 400 million euros for the full year.

The negative impact of increases in raw material prices will rise to a triple-digit
million-euro figure by the end of the year as well. But I would also like to
mention that we see some relief due to the latest developments on the
commodity markets. Therefore, the additional burden will most probably be
less than the 400 million euros we originally expected.
Next on my agenda are the developments of the individual lines of business,
starting with the Automobile segment. This is where the lionÔÇÖs share of the
negative effects I just mentioned was felt.

110 million euros of the increased risk provision were allocable to this segment
in the third quarter. This is based on the loss-sharing agreement with the
financial services business. This brings the total additional residual value
expenses in the Automobile segment to 560 million euros as of September.
Accordingly, the profit before the financial result recorded by the Automobile
segment in the third quarter declined to 141 million euros, compared with 788
million euros in the same period last year. The EBIT margin for the quarter was
thus 1.3 per cent.

Segment EBIT after the first nine months totaled 1.16 billion euros, compared to
2.27 billion euros in the same period last year. This corresponds to an EBIT
margin of 3.1 per cent.

Next up is the Financial Services segment.

It was marked by risk-provision measures as well. This is because this segment
accounts for the remaining share of residual value provisions as well as for the
credit default provisions. Negative effects totaled 232 million euros in the third
quarter and 477 million euros as of September 2008.

In addition, refinancing costs were higher due to the rise in credit premiums on
the capital market.

Accordingly, earnings posted by Financial Services dropped from 191 million
euros in the third quarter of 2007 to a loss of 17 million euros in the quarter
being reviewed.

At 131 million euros, earnings in the first nine months of this year were
significantly down on the 563 million euros reported in the same period last year.

As a rule,
financial services is and will remain an integral part of our business policy.

In view of the financial crisis, we will bring the management of our new
business in stronger alignment with market risks and opportunities.

In this context, I would like to make some more remarks on refinancing.
I already touched on the rise in credit premiums.

The money and the credit markets are not working as they usually do. We
therefore welcome the current measures implemented by the governments and
central banks in order to restore the normal functioning of the capital markets.
Let me explain some facts regarding our refinancing:

We have 4.9 billion euros in cash and cash equivalents and marketable
securities. This gives us a good liquidity position.

And we were able to implement a number of transactions at the capital
markets successfully, even when times are difficult:

o For example, we issued a 1.35 billion euro Schuldschein in April. It has a
term of five years and very attractive conditions. This is the largest
transaction of this kind that we have ever concluded.

o In May, we successfully placed a 1.75 billion euro benchmark bond with a
term of seven years.

o We were flexible enough to offset the increasingly unfavorable conditions
on the bond market in recent months by expanding our private
placement program.

o Moreover, at the end of September we placed a 2.5 billion euro ABS
transaction in September. This is the single-largest transaction of its kind
in the BMW GroupÔÇÖs history.

Another source of financing is the BMW BankÔÇÖs deposit business.

This brings me to the Reconciliations segment.
In the third quarter, this segmentÔÇÖs profit before tax was 285 million euros,
compared with a 135 million euro loss in the same quarter last year. The strong
rise was driven by

the fair valuation of stand-alone interest-rate derivatives

and the sale of just under 73 per cent of our stake in the Cirquent Group,
which we made as we realigned our core in-house funding.

Consolidation effects also had a positive impact.
This concludes my remarks on the individual segments. Let us move on to the
key financials at the Group level.

In light of the decline in retail, Group revenue was down in the third quarter as
well. It dropped by 8.6 per cent, from 13.8 billion euros to 12.6 billion euros.
After nine months, Group revenue thus totaled 40.4 billion euros. This is roughly
on par year on year. Net of currency effects, however, as of September, revenue
was up 5.1 per cent.

In the third quarter, the cost of sales was down 5.5 per cent to 10.3 billion euros
ÔÇô despite the adverse effects of currencies, raw materials and higher risk
provisions I mentioned earlier. Through September, the cost of sales had risen
by 4.0 per cent to 32.72 billion euros. The same effects as in the third quarter
were felt here.

Research and development expenses for June to September dropped by 5.1
per cent year on year. This results in an R&D ratio of 5.6 per cent according to
German HGB in the third quarter. R&D expenditure after the first three quarters
was 1.5 per cent lower than in the same period last year. The R&D ratio was 5.1
per cent, compared with 5.7 per cent a year earlier. These figures prove that we
have become much more efficient in the field of research and development as
well. As far as the German HGB R&D ratio is concerned, weÔÇÖre already within the
range of 5 to 5.5 per cent, which we were aiming for in line with our strategy
Number ONE.

Here, we also benefit from the fact that we have done a lot of groundwork in the
field of environmentally friendly drive systems in recent years. Now, this
translates into a big competitive advantage. But we will continue to adhere to our
maxim: Continue investing in our brands, in technologies and in products ÔÇô and
thus in our future.

Moving right on to the profit before the financial result: In the third quarter, it
declined by 60.2 per cent to 387 million euros. This corresponds to a Group
EBIT margin of 3.1 per cent. After the first nine months, Group EBIT amounted
to 1.64 billion euros. This was 43.6 per cent down year on year. The EBIT
margin for this period was 4.1 per cent.

Compared to the third quarter of 2007, the financial result improved by 100
million euros to minus 108 million euros. As of September 2008, the financial
result was a negative 117 million euros, following a negative 222 million euros in
the same period last year. This was mainly due to fair valuations and the decline
in the net interest expense.

The BMW Group thus earned a profit before tax of 279 million euros in the third
quarter.

This represents a decline of 63.5 per cent and a return on sales of 2.2 per cent.
The profit before tax after the first three quarters totaled 1.52 billion euros. This
was 43.3 per cent less than a year earlier.

The corresponding return on sales was thus 3.8 per cent. As I mentioned earlier,
we will not be able to increase this figure to the forecastÔÇÖs four per cent. This is
because we still expect underlying conditions to be difficult.

The tax expense amounted to 230 million euros after the first nine months. This
translates into an effective tax rate of 15.1 per cent.

The bottom line is that the BMW GroupÔÇÖs net profit for the quarter dropped by
62.9 per cent to 298 million euros. Year to date, this results in a decline of 39.7
per cent to 1.29 billion euros.

This concludes my presentation of the key financials of our income statement.
I would now like to comment on a few select items from the balance sheet and
cash flow statement.

As of September 30, inventories totaled 8.88 billion euros, compared with 8.53
billion euros at the end of the second quarter. As you can see, we have not
raised our inventory level significantly in the last few months ÔÇô mainly thanks to
our adjustments to production volumes.

As of September 30, 2008, cash flows from industrial operations totaled 3.39
billion euros and were 24.2 per cent down year on year. This was caused by the
decline in earnings.

In consequence, free cash flow for the first nine months was a negative 64
million euros for the time being.

However, one must take into account the fact that this figure includes the oneoff
expenses related to the workforce reduction and the increased risk provision,
among other things. In view of the current rifts on the financial markets, for safety
reasons, we converted triple-digit million-euro demand deposits into money
market paper in the third quarter. Without these effects, free cash flow would
have been positive.

The developments of individual cash flows caused cash and cash equivalents to
rise by nearly 1.3 billion euros to 3.65 billion euros, net of the impact of foreign
exchange rates and the scope of consolidation.

The GroupÔÇÖs liquidity position thus remains robust. Net financial assets in the
industrial business amounted to more than 5.4 billion euros as of September 30,
2008. This figure already includes the first tranche of the externalization of our
pension obligations. For this purpose, we transferred more than a billion euros in
securities to the newly established BMW Trust in July.

This rounds off my commentary of the last interim financial statements.
Ladies and Gentlemen,

Taking stock, given the development of our earnings so far and the global
economyÔÇÖs uncertain situation, it is impossible to reliably forecast the companyÔÇÖs
profit for the year.

The same applies to fiscal 2009. It is impossible to make any stable predictions
regarding retail or earnings. I am certain you would agree with me here that there
is simply too much uncertainty in the markets at this time.
But one thing is for sure:

We are putting our pedal to the metal in numerous areas in order to rise to our
current challenges:

We are leveraging our flexible structures in order to adapt production to
demand.

This and other measures will help us optimize our working capital, as
evidenced by the inventory trend, among other things.

We are reducing our material and fixed costs, as can be seen from the decline
in the cost of sales and selling costs.

We are rolling up our sleeves to lower the personnel expense by reducing the
workforce and negotiating voluntary fringe benefits that go above and beyond
what has been collectively agreed.

We are making our research and development work more efficient, as
documented by the current R&D ratio.

Furthermore, we are acting with foresight by increasing provisions for residual
value risks and credit defaults.

But another thing is for certain as well:

Taking action to improve efficiency alone will not be enough over the long term.
This is why we are resolutely implementing performance measures resulting
from our strategy Number ONE at the same time. The key words here are
EfficientDynamics, Project i and tapping new fields of business ÔÇô for example in
After Sales

Therefore, we are still aiming for a return on sales of at least 6 per cent for fiscal
2010. Of course, whether we achieve this goal will depend to a great degree on
how quickly and how well the economy and the sales markets recover.

However, we are optimistic, because by introducing new generations of major,
high-volume models, we will have a decisive lever for reducing material costs
starting in 2010.

As regards our targets until 2012, we still believe the following:
Based on

the flexibility we have in our production network,

our competitive edge above all in the field of environmentally friendly drive
systems,

and the countermeasures I mentioned earlier, we still expect that we will achieve an EBIT margin in the automobile business of 8 to 10 per cent in 2012.
The task at hand now is to do a good job of weathering the current economic
and financial crises ÔÇô and to prepare the company for the next upturn.

We are convinced that we are very well equipped to do so, thanks to our strategy
Number ONE.

Thank you for your attention!

 

[PAULBACH]

No scooter: It has been rumored before. Pietr de Waal from BMW Motorrad NA alluded to it being in the works. Scooter friendly Italy could have been the place to release it. Perhaps it was not far enough through the development pipe to make it out in the current conditions. Alternately is it being delayed in anticipation of the demand for F800R and GS. Any way you read the tea leaves it is a no show.

Italy is certainly scooter friendly but to little rides that sound like a swarm of mosquitoes. The C1 concept was ... sehr gro?ƒ. Very big. I don't think BMW even called it a scooter rather it was a Urban Personal Commuter," a CityMobile or a MotoMobile.

It's time for the C1 has come again but not for the streets of Taormina. It would do well in London, Paris and NYC.