COMPANY PROFILE

Bayerische Motoren Werke AG engages in the manufacture and sale of automobiles and
motorcycles. It operates through the following business segments: Automotive, Motorcycles,
Financial Services, and Other Entities. The Automotive segment develops, manufactures, assembles,
and sells cars and off-road vehicles, under the following brands: BMW, MINI, and Rolls-Royce, as
well as spare parts and accessories. The Motorcycles segment focuses on the premium segment. The
Financial Services segment offers credit financing, leasing and other services to retail customers.
The Other Entities segment includes holding and group financing activities. The company was
founded on March 6, 1916 and is headquartered in Munich, Germany.

Automobiles are marketed under the brands BMW, Mini and Rolls-Royce, and motorcycles are
marketed under the brand BMW Motorrad. In 2015, BMW was the world's twelfth largest producer
of motor vehicles, with 2,279,503 vehicles produced.

BMW is headquartered in Munich and produces motor vehicles in Germany, Brazil, China, India,
South Africa, the United Kingdom, the United States, and Mexico.

BMW has significant motorsport history, especially in touring cars, Formula 1, sports cars and
the Isle of Man TT

The name BMW is an abbreviation for Bayerische Motoren Werke. This name is grammatically
incorrect, (in German, compound words must not contain spaces), which is why the name's
grammatically correct form Bayerische Motorenwerke has been used in several publications and
advertisements in the past.

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PRODUCTION FACILITIES
China

The first BMW production facility in China was opened in 2004, as a result of a joint venture
between BMW and Brilliance Auto. The plant was opened in the Shenyang industrial area and
produces 3 Series and 5 Series models for the Chinese market. In 2012, a second factory was
opened in Shenyang.

Between January and November 2014, BMW sold 415,200 vehicles in China, through a network of
over 440 BMW stores and 100 Mini stores.

Hungary

On 31 July 2018, BMW announced to build 1 billion euro car factory in Hungary. The plant, to be
built near Debrecen, will have a production capacity of 150,000 cars a year.

Mexico

In July 2014, BMW announced it was establishing a plant in Mexico, in the city and state of San
Luis Potosi involving an investment of $1 billion. The plant will employ 1,500 people, and produce
150,000 cars annually.

South Africa

BMWs have been assembled in South Africa since 1968, when Praetor Monteerders' plant was
opened in Rosslyn, near Pretoria. BMW initially bought shares in the company, before fully
acquiring it in 1975; in so doing, the company became BMW South Africa, the first wholly owned
subsidiary of BMW to be established outside Germany. Unlike United States manufacturers, such
as Ford and GM, which divested from the country in the 1980s, BMW retained full ownership of its
operations in South Africa.

Following the end of apartheid in 1994, and the lowering of import tariffs, BMW South Africa
ended local production of the 5 Series and 7 Series, in order to concentrate on production of the 3
Series for the export market. South African–built BMWs are now exported to right hand
drive markets including Japan, Australia, New Zealand, the United Kingdom, Indonesia, Malaysia,
Singapore, and Hong Kong, as well as Sub-Saharan Africa. Since 1997, BMW South Africa has
produced vehicles in left-hand drive for export to Taiwan, the United States and Iran, as well as
South America.

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Three unique models that BMW Motorsport created for the South African market were
the E23 M745i (1983), which used the M88 engine from the BMW M1, the BMW 333i (1986),
which added a six-cylinder 3.2-litre M30 engine to the E30,[100] and the E30 BMW 325is (1989)
which was powered by an Alpina-derived 2.7-litre engine.

BMWs with a VIN starting with "NC0" are manufactured in South Africa.

United States

BMW cars have been officially sold in the United States since 1956 and manufactured in the United
States since 1994. The first BMW dealership in the United States opened in 1975. In 2016, BMW
was the twelfth highest selling brand in the United States.[104]

The manufacturing plant in Greer, South Carolina has the highest production of the BMW plants
worldwide, currently producing approximately 1,400 vehicles per day.[106] The models produced at
the Spartanburg plant are the X3, X4, X5, X6 and X7 SUV models.

In addition to the South Carolina manufacturing facility, BMW's North American companies
include sales, marketing, design, and financial services operations in the United States, Mexico,
Canada and Latin America.

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PRODUCTION

Production Site and Production Process Since November 1986, BMW 3 series cars have been in
production in Regensburg, situated on the banks of the Danube in Bavaria. Covering an area of 350
acres, the plant employs approximately 9000 workers producing 215,000 BMW 3 series (sedan,
station wagon, coupe, convertible) per year. The manufacturing process of an automobile can be
divided into four major steps: 1) Stamping of the metal sheet blades in the press shop, 2) Welding of
the parts in the white body shop, 3) Painting of the car body in the paint shop, and 4) the final
assembly of the car. Figure 1 illustrates this process. The production process begins with metal
sheet blades that are stamped in the press shop. Then the stamped body parts are welded together in
the white body shop to create a car body. Before the car body is painted in the paint shop it is stored
in a stacker called white body stacker. Since the painting process works optimal if bodies to be
painted with the same color follow immediately one after the other, the white body stacker is used
to sort the bodies produced by the white body shop. The aim is to build clusters of approximately 20
bodies to be painted with the same color. Before the painted bodies go to the assembly area, where
several thousand parts are added on an assembly line, they are stored in another stacker called
painted body stacker. 3series sedan cars, coupes, convertibles and touring models are produced in
varying sequence. On the assembly line, the aim is to achieve an optimum mix of vehicles. Each
vehicle is being built according customer order and assembly thus needs to take into account a wide
diversity of customer order wishes. The stacker is used to determine a sequence of cars on the line,
which ensures an even distribution of the workload amongst assembly workers. Thus the painted
body stacker is used to sort the painted bodies in a way to support an optimal assembly process.

Figure 1: Overview of Manufacturing Process

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The assembly line is divided into three main sections: trim, chassis and final assembly. Lightweight
parts are installed in the trim section, while heavier parts, such as the engine and transmission, are
installed in the chassis section. The production process ends in the final assembly, where a number
of small operations are performed, such as filling various fluid reservoirs, making numerous quality
checks and conducting minor repairs as necessary. The parts supply process supports the assembly
line. This process starts with a supplier plant producing a part and ends with the part arriving in an
assembly worker’s hand as the car requiring that part enters the workstation. Supply plants are
provided with build schedules via an electronic data interchange network with sufficient lead-time
to deliver the required parts when they are needed. The plant in Regensburg uses several Just-in-
Time supply relations to deal with product variety. The cars produced by the plant Regensburg vary
along several dimensions, including body stile, exterior and interior color, harness, power train and
choice of options. Looking in more detail at the described production process there are many
possible circumstances which raise problems due to the production process, such as downtimes of
robots in the white body shop, increase of repainting because of paint process problems or
downtime of work stations in the assembly line. Many of these problems influence the inventory
levels of the white body stacker and/or the painted body stacker. Another important factor
influencing these inventory levels is the operations time of a production department. At the plant in
Regensburg the white body shop uses a different shift model with different operations times than
the paint shop. Therefore the white body stacker must be able to buffer sufficient white bodies to
compensate these variations in operations times. Similarly the painted body stacker must be able to
buffer enough painted bodies due to different shift models between the paint shop and the assembly
shop.

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PRODUCTION PLANNING AND CONTROL

At BMW’s production plant in Regensburg the production-planning department is responsible for

planning and controlling the production schedule and –mix, including the management of the white
body and the painted body stacker. Four basic functions can be identified: planning, dispatching,
control, and taking of corrective action if the actual performance deviates from the planned
performance. In the planning phase the production schedule and the production mix (i.e. the ratio of
sedan, coupe, station wagon, convertible of the whole production) are planned. Typically the period
that is planned for is one month. Note that planning starts several weeks before the actual start of
production and the production schedule has to be fixed two weeks before actual production starts. In
car manufacturing production planning is characterized by high complexity and uncertainty because
various parameters, such as operations times, capacity of the white body stacker and the painted
body stacker, changes in production mix, changes in production capacity, and various time delays,
such as the time a car body needs to go through a production area or the time a body is stored in the
white body stacker resp. painted body stacker, have to be considered. The function of dispatching
puts the plan into effect, that is operations are started in accordance with the plan. In the operating
phase the production-planning department has to observe and record the actual performance of
production, e.g. it monitors the inventory levels of the white body and the painted body stacker.
Typically this is done on a day-to-day basis. The actual performance is compared with the planned
performance, and when required, corrective action is taken. This happens, e.g. if the inventory
levels of the white body and/or painted body stacker get too low or too high or if problems in the
production process occur. Finding out the right steps to correct the inventory levels is also
characterized by high complexity and uncertainty because of various parameters and various time
delays.

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AS A VEHICLE IS PRODUCED: THE PRODUCTION PROCESS IN FOUR
STEPS.

The BMW Group offers premium emotions. Exceptional automobiles, which are characterized by
high quality and outstanding design. Automobile production with this claim is a complex process
with a high logistical effort: As premium is not only best quality but delivered individually tailored
and in time. This is made possible by the particularly efficient, customer-oriented production system
of the BMW Group. The basic idea: The vehicle desired and ordered by the customer determines
the automotive production process, not the vehicle planned by the company.

PRESS SHOP: HIGH-TECH MATERIAL IN TOP FORM.

The stamping plant provides the sheet metal parts for the bodywork. The manufacturing process
begins with extremely heavy rolls of steel and aluminum sheet, the so-called coils. In the coil
systems, the bands are initially cut to form boards and then pulled with the most modern, fully
automated high-speed servo presses in several steps, bent and punched. This results in molded parts
such as side frames, doors, hoods and roofs.
The bmw group uses a function-oriented mix of proven deep-drawing steels and high and higher
strength materials.in the item production we already lay the basis for the unique design and the
extremely rigid, but lightweight bodies of our vehicles.
The technology used in the bmw group is the most advanced worldwide. The available total press
capacity of a plant is up to 10,000 tons.

BODY SHOP: PRECISE FINISH.

Body shop means the precise assembly of several hundred individual parts made of steel and
aluminum of different sizes and thickness to a precision body. Depending on the vehicle
requirement besides steel and aluminum also carbon and fiber composites (SMC) are installed. With
a high degree of technical know-how resulting from welding and joining techniques such as spot
welding, soldering, screwing and gluing, as well as the new laser welding millimeter accuracy
bodies. Most modern robots perform these serious and complex work with maximum precision,
while highly qualified employees control the machine and wait.

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HIGHEST AUTOMATION.

With a degree of automation of up to 95 percent of the so-called spot welding - the robot is here at
predetermined locations of the body weld points - is the production area of ​ ​ the body a highly
automated technology in the BMW Group production.

PAINT: BRILLIANCE WITH FUNCTION.

Hardly a detail of an automobile acts so strongly on the senses like the color of the paint. At the
same time it serves to protect and preserve the value of the automobile.But the bodies are first
cleaned in plunge pools and degreased, then coated with a zinc phosphate layer. This forms the
basis for lasting corrosion protection. Then four more coats of paint, protect the vehicle against
environmental influences and give a durable color gloss.

After each production step, the quality is checked in the paint. Laboratory specialists examine, for
example, by environmental simulation, the colorfastness of all coatings and resistance to
environmental influences.

MOUNTING: INDIVIDUAL AND PRECISE.

Experienced and well-trained staff complete the painted bodies. In the course of individual
production can be realized even unusual customer requests. Various equipment, attachments,
country versions and more lead to the distinctive customized product. More than 20,000 interior
variants are possible solely with the BMW 3 Series. Due to this limitless possibilities it almost
never happens that two identical vehicles are coming consecutively on the assembly line.

FINAL ASSEMBLY

Within the final assembly the highlight of the entire production takes place, the so-called wedding.
The drive unit of the engine, transmission, axles and exhaust system meets precisely to the
corresponding body and is screwed. The proverbial Sheer Driving Pleasure is essentially determined
by the exact coordination of these components. Now the vehicle is stationary on its own wheels.
Last parts are mounted and the engine is started for the first time. After numerous tests the new
vehicle rolls off the line.

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VALUE-ADDED PRODUCTION SYSTEM

At BMW Manufacturing, continuous improvement is something our team takes very seriously. We
believe it’s a key difference that distinguishes BMW from the competition — and flexibility
throughout the production process is an essential factor in improving productivity and efficiency.

By implementing the Value-Added Production System (VPS), BMW is adding maximum value
while minimizing waste in all production and support area processes. From supplier to dealer, from
product development to production itself, VPS is helping ensure total customer satisfaction in a
timely, efficient, quality-focused manner.

Since its global launch within the BMW Group in 2006, VPS has played a vital role in continuous
improvement. Here at BMW’s only North American manufacturing facility, VPS principles are
being applied and assessed every day — and the results have been impressive.

The impact of the Process Excellence / Continuous Improvement initiative has been a 25%
improvement of the operating cost structure, totaling more $225 million. Because of this
comprehensive approach, VPS activity has helped introduce new behaviors and guidelines from the
top down, eliminating the need for costly additional support programs and projects.

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BMW bought the British Rover Group (which at the time consisted of the Rover, Land Rover and
MG brands as well as the rights to defunct brands including Austin and Morris), and owned it for
six years. By 2000, Rover was making huge losses and BMW decided to sell the combine. The MG
and Rover brands were sold to the Phoenix Consortium to form MG Rover, while Land Rover was
taken over by Ford. BMW, meanwhile, retained the rights to build the new MINI, which was
launched in 2001.

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