SPEECH: DR. HELMUT PANKE - GENEVA 2006
Ladies and Gentlemen -
I would also like to welcome you at the BMW Group Press Evening here at the waterworks.
As you can see, tonight's setting is dedicated to motor sports. We have brought an entire range of vehicles, which are the showpieces of the BMW Group's activity in this field. My colleague Burkhard Goeschel will tell you a bit more about these cars later.
We have chosen this setting set for tonight's get-together as it symbolizes the essentials of the BMW Group's success: competition, the strong will to deliver top performance and the aspiration to succeed - "winning the race" in motor sports terms.
In brief: The BMW Group is a top performer - as the outstanding business year 2005 has just shown again.
You all know that 2005 was not an easy year for the global automotive industry. Manufacturers in general suffered from the effects of high raw material prices. And those companies in particular which - just like the BMW Group - are very successful in the U.S. also had to deal with the year's unfavorable euro-dollar exchange rate.
Please do not get me wrong: I am not complaining. 2005 was again a very successful year for the BMW Group. All our three brands - BMW, MINI and Rolls-Royce - posted new records in retail volume last year. We sold a total of over 1.3 million vehicles worldwide. This is an increase of almost 10 percent compared to the business year 2004.
Currently, the BMW brand is the world's most successful premium brand. For the first time, the company delivered more vehicles to customers than any other premium brand. Most BMW model series are market leader in their respective segments, for example the BMW 3 Series, the 5 Series and the 7 Series.
And more than that: In 2005, the BMW brand was also the world's fastest-growing premium manufacturer. Not only is BMW the number one; it is even extending its lead. Percentages do not always reflect that, but:
• If a company that sells one million vehicles a year grows by 10 per cent, it has won an additional 100,000 customers.
• If a competitor that sells only 700,000 vehicles a year also grows by 10 per cent, naturally this is only an increase of 70,000 customers.
• So in this case, the first company would actually have extended its lead by 30,000 customers.
But no one even matched BMW's growth rate last year. In 2005, the BMW brand grew more than any other premium brand with a comparable product portfolio. And that not only in absolute terms, but also in terms of percentage. So below the line, our lead has increased substantially. Of course, some of our competitors are trying to give the impression that they are about to catch up. But the facts speak for themselves:
In 2005, no other premium brand managed to grow as much as the BMW brand,
• no premium brand in Asia,
• no premium brand in the U.S.,
• and no premium brand in Europe, let alone in Germany.
And this statement holds true even if you take a broader view: Over the last five years, the lead of the BMW brand has increased considerably - in some cases it has even doubled.
Ladies and Gentlemen -
Whether a company delivers top performance or not is obviously not only a question of retail volume. True enough, those figures are highly significant. But they are not sufficient if you want to evaluate a company's success.
The company's bottom line is equally important in this context. And again, we are able to say: The BMW Group is a profitable top performer. Just compare our key data like earnings or profit margin to those of our competitors and you will see: The BMW Group is not only the number one premium manufacturer in the automotive industry in terms of retail volume, but is ahead of almost all direct competitors in terms of profitability as well.
Why is that so?
Just think about what the answer to this question would be in motor sports. It would pretty much always be the same. You can only win if all pieces fit together - if several individual top performances coincide:
• This includes the driver,
• the engine,
• the chassis,
• aerodynamics,
• the mechanics,
• and a lot of other crucial factors.
Success will not come if you rely on one single top performance in one particular area - many top performances have to be combined.
And basically the same applies for companies.
The reason why the BMW Group is extending its lead over competitors within the industry is that we have managed to create an ideal and harmonious combination of a high-performance team, a high-performance organization and high-performance products.
From the BMW Group's perspective I can say: Trying to improve continuously as a high-performance company - as we have been doing for many years now - has definitely paid off.
We have clear goals:
• We want to provide our customers with emotional, individual and desirable premium high-performance products.
• To this end, we strive for maximum efficiency everywhere in our company. Our structures, our organization, our processes - everything is geared towards ensuring top performance. If we see potential for improvement, we seize the opportunity - without any ifs, ands, or buts.
• And last but not least: We intend to be the most attractive employer to the best staff. One thing is a given: A high-performance company has to be successful in recruiting and retaining the smartest employees.
Top performance is the main line of thought running through our company and the key driver of our success. And we are continuing along this path.
One of the BMW Group's guiding principles is balancing the give and take. That is to say: High-performers deserve high rewards. This means: We definitely have high expectations of all our associates. But in return, we are more than willing to honor their achievements. Let me give you one example: Several decades ago, we established a profit bonus system that is directly linked to the success of the company.
This way, we raise motivation as well as the associates' willingness to deliver the top performance we are known for.
If we speak about the BMW Group as a high-performance team, there is one thing we must not forget: Our strength does not result from the company management requesting top performance, but from our associates wanting to be a team of top performers. No matter where our associates work and what they do - they are proud to be part of our winning team.
All BMW Group associates want the company to succeed. In order to reach this goal, they are willing to go to their limits.
This is how we have mastered our product initiative of the past years. And this is how we intend to expand further in the years to come. But not at any cost.
We have three extraordinarily strong brands, each with its own, clear profile. Our brand and product portfolio does not overlap at any point. But the crucial point is: Each of our products is a 100 per cent perfect match for the BMW Group and for our brands.
Let me be a bit provocative here: The success of our product initiative is not only the result of the new products we have launched over the last few years, but also of those we did not produce.
We definitely stand our ground when it comes to offering nothing but high-performance products to our customers. This means, though, that in case of doubt we must not compromise.
We would rather miss out on the opportunity to expand into a new segment instead of offering a compromise which was neither up to our standards nor to customers' expectations.
I guess we might be able to make money with a product that does not suit our company and our brands. But in the end, the long-term damage would outweigh any benefit.
Ladies and Gentlemen -
For many years, the BMW Group was a runner-up to the industry leader. Year by year - or lap by lap - we caught up a bit more. And last year, we finally managed to get ahead.
Now we are in the lead and this is where we want to stay. Of course we realize that our competitors are not slowing down, but are trying to catch up again. However: We are aware of this situation. We are not going to make the mistake of being content with our current lead. We are continuing to go to our limits.
Tomorrow, when you visit the stands of our three brands at the Geneva International Motor Show, this is exactly what you will see: We are working at full speed. Our product initiative is in full swing. Our products have an emotional appeal, and they keep fascinating our customers. In other words: We continue to deliver top performance - and we will stay in the lead.
Tonight our motor sports activities are taking center stage. And I am delighted to see so many of our motor sports protagonists here tonight. As a matter of course, success in motor sports always depends on the interaction of excellent technology and an excellent team of people getting the best out of this technology.
You see, this is also about the interaction of high-performance products, a high-performance organization and a high-performance team.
Thank you for your attention. I now give the floor to my colleague Burkhard Goeschel. He is going to present some highlights from recent motor sports history. But first, we have a short film for you which demonstrates the importance of motor sports for our company: And action!