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Long Term Thinking and Responsible Action

Firstly, we cannot ignore the general crisis and the impact on the automotive industry, how is BMW Group affected, generally and in Slovenia?
Due to a positive trend in demand, particularly in the US, China and the emerging markets, BMW Group is again able to continue its path of profitable growth this year. For example, BMW Group sales in September 2012 grew 11.6% globally versus the previous year. So we have been able to increase our overall sales performance to an unprecedented 1,335,502 BMW Group vehicles YTD to September 2012. However, we are experiencing a slight decline in demand in the European markets versus last year. The Slovenian car market, in particular, suffered a downturn of approximately 30% in August and September 2012 versus the previous year. This is why we are trying even harder to act faster, to be more innovative and to work even more closely with our dealers and marketing cooperation partners.

Are people in Europe turning to cheaper and lower quality products or are you, as a premium car producer, maybe not so affected? What are your results in new markets, China for example?
China will become the most important market for premium vehicle manufacturers in the near future. The premium segment in BRIKT countries (Brazil, Russia, India, Korea and Turkey) is also growing above average. As a general observation, the premium segment is more stable than the total car market. This is definitely also true for the European markets including Slovenia. We have a large customer base of corporate and diplomatic customers who, in general, react less to economic cycles. In these segments we still see more potential for profitable growth.

Some producers are very aggressively turning to electric cars, what is the policy of BMW in this area - being known as a producer that promotes the basic pleasure of driving, sometimes "e cars" are just not the real thing?
BMW Group has a clear competitive advantage with its Efficient Dynamics strategy which was introduced in 2007. Efficient Dynamics is a package of intelligent technologies designed to significantly reduce fuel consumption and emissions and, at the same time, increase performance. Efficient Dynamics technology is a standard feature on all vehicles produced by the BMW Group. In the future we also intend to play a pioneering role in the industry for e-mobility. Since 2009 we have gathered a lot of knowledge with one of the world's largest trial fleets of electric cars driven by customers on the roads with the MINI E and from 2011 with another trial fleet of around 1,100 BMW Active E vehicles. This experience made us confident to launch the BMW i in 2011, a new sub-brand for vehicles that are built around an electrical drive train. Furthermore, we have consequently rethought the entire value chain from development to recycling including sourcing, production, sales and the phase of usage, with a focus on sustainability. The result is vehicles with entirely new technologies, an outstanding design and the lowest possible CO2 emissions. Nevertheless, the most important feature will remain unchanged - sheer driving pleasure. As the first model BMW Group will launch the BMW i3 at the end of 2013. It is the first series-produced electric vehicle built for individual urban mobility. Soon the BMW i8 will follow, a true sports car which combines an acceleration of 0 to 100 km/h in under five seconds with fuel consumption in the European cycle of under three litres per 100 kilometres. This plug-in hybrid will show a thrilling design and will offer breathtaking driving performance.

Is the current electric technology really a "proper" substitute for existing oil driven technology or are we still waiting for cost effective solutions?
Huge investment flows into the development of new battery technology. This is why we can expect significant improvements in electric storage capacity along with a reduction in weight and costs. Nevertheless, we expect to see a wide range of drive-train technologies for different customer requirements in the future. For people who live in a large city or are commuting in an urban environment, battery electric vehicles, with or without range extender, might be an ideal solution. For a similar target group that uses the car occasionally to go on extended business or holiday trips, a plug-in hybrid might be an ideal compromise. For all other customers who are frequently driving long distances, a highly advanced combustion engine with mild forms of hybrid technology will continue to remain the first choice for a long time. We expect that in 2020, battery electric vehicles and plug-in hybrids together will achieve a global share of between 5% and 15% of newly registered vehicles if basic conditions have been defined.

Major producers are investing a lot in "green" and "sustainable" technology, what are the lastest superior solutions in BMW? What will be the main trends in the next few years?
For the eighth consecutive year, BMW Group was named the most sustainable car company in the Dow Jones Sustainability Index. We achieved this mainly by investment in new technologies that are significantly above average in our industry. We believe that this is the best strategy to meet the high expectations of our premium customers today and tomorrow. From 2007 every one of our vehicles has come with a set of Efficient Dynamics solutions as standard equipment. This amounts to more than five million vehicles with CO2-reducing technology on the road today. Hence we were able to reduce the fleet consumption from the mid 1990s by 30%. But we still follow ambitious targets and want to halve more or less the overall fleet consumption by 2020 compared to the mid 1990 levels. One very important step on our future path is our new BMW TwinPower Turbo engine family with 3-, 4- and 6-cylinders and displacements from 1.5 to 3.0 litres. In the future we will equip all of our BMW Group engines with the latest technology such as Valvetronic, High Precision Injection (a direct petrol injection system) and turbo-charging for petrol and common rail injection system, a variable nozzle turbine for diesel engines. With this new engine generation we will achieve an unprecedented level of shared parts, including between petrol and diesel engines, as well as flexible production at different plants.

What is your prediction for major market developments in next year and particularly in Slovenia?
We strongly believe that a sustainable way of doing business will remain a long-term competitive advantage for premium manufacturers. Our customers enjoy the benefits of high residual values, an unexpectedly low cost of ownership and the convenience of our standard service inclusive programmes which cover nearly all after sales expenses in the first years of ownership. Therefore we are confident that we are already utterly competitive in the market. This is why we want to resist the temptations of short term success through high cash discounts, even in the time of crisis. Instead, together with our dealers, we will try even harder to invent attractive offers with high product substance and premium services for our customers.

Will you stick with your existing market strategy in Slovenia, you are investing a lot in sustainable oriented projects or will you make some changes, adopt new concepts, organisational changes in the dealer network....?
Premium products must be in line with premium services and sustainable solutions. All these fields are of increasing importance to our customers. Here we believe we have a significant competitive advantage in the years to come. Furthermore we care, in particular, about the benefits for our customers in all our activities. This can only be achieved in stable partnerships with our dealers and main cooperation partners. While our dealer network shall remain unchanged, we rather want to concentrate on a smaller number of marketing cooperation's that we even intend to deepen. Our special focus for the cooperation's for the BMW brand lies in the field of sustainability.