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.March 17, 2004
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This Week:

• The Birthplace of the Minivan Takes on a New Persona 

• Toyota and Ford Conclude Licensing Agreements for Hybrid System and Emissions Purification Patents

• GM Celebrates Start of Construction On New $800 Million Lansing Area Assembly Plant

• Successful financial year 2003 for the BMW Group: Proposed dividend increase

• New smart models increase the pleasure of driving with the wind in your hair

• Renault Modus Concept

• Chrysler Announces Pricing for New 2005 Crossfire Lineup

• 2004 Ford F-150 Regular Cab, Supercab, Supercrew, Receive Government's Highest Rating For Frontal Impact

• Successful development of Volkswagen subsidiary Sitech

• Honda Delivers its Fuel Cell Vehicle FCX to Idemitsu Kosan Co., Ltd.

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Successful financial year 2003 for the BMW Group: Proposed dividend increase
 

Munich - The BMW Group continued to perform well in 2003 and, as forecast, achieved earnings at the previous year's level. The group profit from ordinary activities, at euro 3,205 million, was only just below the record level of 2002 (-2.8% / 2002: euro 3,297 million). The net profit for 2003 was euro 1,947 million (-3.6% / 2002: euro 2,020 million). Earnings per share were euro 2.89 (2002: euro 3.00) per share of common stock and euro 2.91 (2002: euro 3.02) per share of preferred stock. The BMW Group reports a record cash flow of euro 4,490 million, 2.7% above the level of the previous year (2002: euro 4,374 million).

Helmut Panke: "All targets met"

"During a phase of continued high expenditure for the product and market offensive and despite the fact that economic conditions prevailing on some of the world's automobile markets were difficult, the BMW Group met all of its targets", stated Dr. Helmut Panke, Chairman of the Board of Management of BMW AG. "We will continue this positive development in the current financial year by increasing sales volumes and earnings."

In addition to the continued high level of expenditure for the product and market offensive, results for the financial year 2003 were also affected by the announcement of changes to the statutory provisions for early retirement part-time working arrangements, which resulted in an expense of euro 110 million to increase provisions at the year-end. Moreover, changes in German tax legislation relating to the treatment of existing corporation tax credits lead to an exceptional tax expense of euro 50 million for the financial year 2003.

Proposed dividend increase

In view of the sustained high quality of earnings and the positive outlook for business, the Board of Management and the Supervisory Board have proposed an increased dividend. Subject to approval, the unappropriated profit available for distribution in BMW AG of euro 392 million will be used to pay a dividend of euro 0.58 for each common stock share (2002: euro 0.52), 12% higher than in the previous year and a dividend of euro 0.60 for each preferred stock share (2002: euro 0.54), 11% higher than in the previous year.

Share capital entitled to receive dividends amounts to euro 673.5 million (622.2 million common stock shares and 51.3 million preferred stock shares, each with a nominal value of 1 euro).

The Automobile segment was particularly affected by up-front expenditure for the product and market offensive. The segment profit from ordinary activities was euro 2,761 million and thus 4.2% lower than the previous year's figure (euro 2,883 million). A substantial level of up-front expenditure for new models also affected the reported results of the Motorcycles segment. The profit from ordinary activities fell by 16.7% to euro 50 million (2002: euro 60 million). The Financial Services segment once more achieved a record profit in 2003. The segment profit from ordinary activities improved by 7.1% to euro 452 million (2002: euro 422 million).

New sales volume records for all brands

With a total of 1,104,916 BMW, MINI and Rolls-Royce brand cars sold, the BMW Group achieved a new sales volume record in 2003, surpassing the 2002 record by 4.5% (2002: 1,057,344 cars). Sales of BMW brand cars went up by 1.6% to 928,151 cars (2002: 913,225 cars). With a total of 176,465 Mini brand cars sold, unit sales were almost a quarter higher (+22.4%) than in the previous year (144,119 cars). A total of 300 Rolls-Royce cars was sold during 2003.

Motorcycle unit sales again above previous year's level

The Motorcycles segment achieved sales volume growth for the eleventh time in succession despite difficult market conditions. 92,962 BMW motorcycles were sold during the year, 0.4% more than in the previous year (2002: 92,599 units).

Strong growth in the Financial Services segment

The BMW Group remained on growth course in the Financial Services segment in 2003. The volume of new retail customer financing contracts grew by 10.7%, reaching a new high level of over 710,000 contracts (2002: 641,638).

Revenues lower as a result of exchange rate changes

Group revenues fell by 2.1% to euro 41,525 million (2002: euro 42,411 million) as a consequence of the low US dollar exchange rate. Adjusted for changes in exchange rates, the Group achieved sales revenue growth of 4.2%. Revenues of the Automobiles segment, at euro 38,317 million, were 0.4% higher than in the previous year (2002: euro 38,179 million). Revenues of the Motorcycles segment fell by 6.6% to euro 1,055 million (2002: euro 1,130 million). The Financial Services segment generated revenues of euro 7,582 million (-9.1% / 2002: euro 8,342 million).

Capital expenditure increased again

The BMW Group is laying the foundations for continued expansion in the years ahead with substantial levels of capital expenditure. In 2003, the Group invested euro 3,249 million in intangible assets and property, plant and equipment (2002: euro 3,184 million). Together with development costs of euro 996 million (2002: euro 858 million) which are required to be recognised as assets in accordance with IAS 38, total additions to intangible assets and property, plant and equipment amounted to euro 4,245 million (2002: euro 4,042 million). This represents an increase of 5.0%.

Election to the Supervisory Board

The five-yearly election of members to the Supervisory Board representing shareholders will take place at the Annual General Meeting on 13 May 2004.

The following members of the Supervisory Board are proposed for re-election: Volker Doppelfeld, Arthur L. Kelly, Susanne Klatten, Prof. Dr. rer. nat. Dr. h.c. mult. Hubert Markl, Prof. Dr.-Ing. Dr. h.c. Dr.-Ing. E.h. Joachim Milberg, Stefan Quandt, Prof. Dr. Jürgen Strube, Dr. oec. publ. Hans-Dietrich Winkhaus.

The following individuals have not put themselves forward for re-election to the Supervisory Board: Prof. Dr. Bernd Fahrholz, Dr.-Ing. Dieter Soltmann.

The following individuals are proposed for election to the Supervisory Board: Franz Markus Haniel, Member of the Board of Directors of Giesecke und Devrient GmbH, and Wolfgang Mayrhuber, Chairman of the Executive Board and CEO Deutsche Lufthansa AG.

The employees' representatives for the Supervisory Board were elected at a delegates' meeting on 2 March 2004.

(March 11, 2004)