BMW Currency Hedging

The BMW Group will expand production capacity at its US plant in Spartanburg from some 150,000 to 240,000 units by 2012. Plans for the expansion are already underway. Capacity at the Oxford MINI plant is to be increased to 260,000 units per annum—without making further investments in infrastructure.The BMW Group will take the first step towards expanding its capacity in China by raising it from 30,000 to 44,000 units a year. Furthermore, the company will work on strategically increasing purchasing in US dollars. One aspect is the local content of the vehicles manufactured in the USA. In recent years, it was increased from about 30% to more than 60%. Another aspect is purchasing in the NAFTA region for production in Europe and other regions. In 2006, the NAFTA region accounted for some 9% of BMW’s global purchasing.BMW Group set to tap new business fieldsThe BMW Group will continue to grow by introducing new models going forward. In addition, the company will develop new fields of business and operate along the vehicle lifecycle as well as along the value-added chain. This includes the planned development of new sales channels in the accessories business. In the pre-owned vehicle business, the company operates in the premium pre-owned segment. Both activities are lucrative, since a mere 25% of the revenue generated over a vehicle’s lifecycle stems from the new car business. Moreover, the BMW Group plans to offer entirely new individual mobility services as well as service modules.By adopting this new strategy, the BMW Group has set the course for a future of success. â€Å"We will continue to write the BMW Group’s success story. Our entire management team is committed to this,† Reithofer declared.