Good morning,

Ladies and Gentlemen.

 

Over the past several weeks, we have seen how quickly our business
environment can change.

 

As Walter outlined, the Q2 results reflect our adjusted guidance.
However, the figures in the first and second quarters are not satisfactory.

 

The rapid deterioration of the market in China was the main trigger
that forced us to adjust our guidance in June. In addition, new
competitors are also expanding into several markets across
Asia-Pacific, Latin America and Europe. These market dynamics,
however, are just one aspect of the fundamental changes in our industry.

 

In a little over a year, several other factors have converged and
have had a significant impact on our business environment, including:

 

headwinds from tariffs, trade barriers and currency exchange rates;
increasing requirements in regulations, especially in Europe; and 
the impact of the ongoing conflict in the Middle East.

 

To address these challenges we are taking immediate, decisive action
to drive the necessary change.

This will ensure that we remain competitive and will return us to
better results – for the short, medium and longer term.

 

In the short term, we are taking steps to accelerate ongoing cost
reduction initiatives, focusing on structural and efficiency measures.
These will deliver a sustained reduction of our overall fixed costs.
The impact will be visible from 2027 onwards and will provide a new
baseline for our strategic and operational measures going forward.

 

One important aspect is the dimension of the organization, which we
will make leaner to increase speed and effectiveness. We have made
very quick progress with the General Works Council to reach an
agreement on a workforce restructuring program. This includes a
voluntary severance program in indirect functions in Germany.

Now, we will move forward with the implementation of the agreed
measures in order to realize the benefits in the near term.

 

As our industry continues to transform, we need to be prepared for
the road ahead – by tackling both our structures and our processes.

To ensure that we are fit to deliver the necessary changes in the
mid-term, we are closely examining the entire value chain and have
begun to take action on four key areas internally:

 

Customer journey, our organizational structures, delivery and
purchasing, and engineering.

 

To give you an idea of what we are looking at:

 

On the customer side: our focus is on the
continued implementation of a new sales model in Europe, which
requires a shift in mindset from wholesalers to retailers.

At the same time, we are optimizing every touchpoint in our customer
ecosystem and leveraging the data we have to generate additional
business opportunities.

 

On the organizational side: this means making
greater use of AI to further automate processes and increase speed;
as well as accelerating decision-making throughout the organization.

 

On delivery
and purchasing: we are looking at how value
creation is distributed globally and identifying opportunities to
expand our local-for-local approach.

 

And on engineering: our focus is on increasing
the speed of development through further standardization and
communality in engineering solutions and components.

 

Across all these areas, we will fundamentally transform the company.

 

On the long-term perspective, we are constantly looking at the
broader, strategic picture – covering technologies, products, markets
and brands.

 

In all of these areas we are taking significant steps and picking up
the pace. For example, we are re-evaluating which technologies,

model variants, and drivetrains we will need in the future. We are
also further tailoring our approach to individual markets and their
specific product and drivetrain requirements. And we are evaluating
where we can pursue new partnerships where it makes economic and
technological sense.

 

While we face a lot of headwinds at the moment, we also have a solid
foundation to leverage. In Q2 we saw a strong performance in Europe
and the US which could partly counterbalance the developments in China
and Asia Pacific. And our performance in China to date in 2026 was at
least in line with the overall market development.

 

We will also build on key changes that we have made in the last
years, in particular the significant investment in Neue Klasse.

But this also includes the consolidation of the dealer network in
China and, not least, the cost savings of 2.5 billion euros that we
made in 2025.

 

As we look ahead, our strong portfolio of premium products and
technologies, our drivetrain approach and our global footprint provide
us with a strategic direction as we navigate the current market environment.

 

First: our products and technologies.

The rollout of the Neue Klasse is now well underway.

 

The BMW iX3* continues to see strong momentum:

We are on track to reach the next major milestone of 100,000 orders.

 

To support this incredible demand, we introduced a second shift at
Plant Debrecen ahead of schedule. Since the start of series
production, the plant has already produced 50,000 BMW iX3 – the
fastest ramp-up of a new BMW Group plant.

 

We have also seen strong demand for the BMW i3 launch edition with
initial orders, which we started earlier than planned in June. Regular
ordering will open at the end of September.

 

Just a few weeks ago, we also celebrated the world premiere of the
new, fifth-generation BMW X5. The new X5 shows the full potential of
our technology-open approach – the second pillar of our
strategic foundation.

 

Customer needs and expectations vary widely from market

to market – and even within individual markets. Our Q2 sales also
reflect this reality and the strength of our technology-open approach.
In Europe, sales were supported by BEV growth, which jumped by over a
third in Q2. In the US, sales of ICE vehicles drove growth to double
digits in the second quarter, as BEV demand in the overall market fell.

 

The positive response to the BMW iX3, i3, new 7 Series and X5 shows
that we have made the right investments to bring the right product
momentum to the markets. And there is much more to come, as our
product roadmap remains firmly on track: by the end of next year, we
will have launched 40 new and updated models.

 

This includes the first Neue Klasse models in China – the BMW iX3 and
BMW i3 long-wheelbase. Produced at our manufacturing base in Shenyang,
they have been developed specifically for Chinese customer
preferences, and incorporate technologies from local tech players.

 

This illustrates the third key pillar of our strategy:

our global footprint with a local-for-local approach.

 

In major markets, it allows us to better address individual market
needs, while serving demand through local production and supply
chains. Particularly in challenging times, this set up offers us
significant resilience and flexibility as developments vary from
market to market.

 

Ladies and gentlemen,

 

We are operating in a dynamic and challenging environment.

 

We are taking a critical look at how we work, including re-visiting
core processes and structures that previously were considered untouchable.

 

We know we have hard work to do on the road ahead. My responsibility
is to ensure that we pick up the pace and increase the impact.

We know we can put the company back on a solid, enduring path to the
premium profitability that the company is capable of generating.

 

We remain ambitious and intend to return to our strategic EBIT margin
corridor of 8-10% by the beginning of the next decade. In the interim,
we will work our way back to this target step-by-step.

 

Ultimately, it’s about ensuring the long-term success of the company
and creating value for our customers, our partners and our investors.

 

Thank you.