Bmw Group Financial Services Bankers Day China.

BMW GROUP FINANCIAL SERVICESBANKERS DAY CHINA.SERGE NAUDIN, PRESIDENT AND CEO OF BMW GROUP FINANCIAL SERVICES CHINA21st July 2020Financial Services

BMW GROUP FINANCIAL SERVICES SET-UPIN MAINLAND CHINA.BMW AUTOMOTIVE FINANCE (CHINA) CO., LTD.(BMW AFC), JV by BMW Group (58%) and BBA (42%), incorporated 2010RETAIL LOAN WHOLESALE LOANHERALD INTERNATIONAL FINANCIAL LEASING CO., LTD.(HERALD), JV by BMW Group (58%) and BBA (42%), acquired in 2016 LEASING MOTORRAD CONSULTING SERVICE** Consulting and Third Party Administration (TPA) services to AWP BusinessServices (Beijing) Co., Ltd., delivered by Herald Hezhong (Beijing) AutomotiveTrading Co. Ltd, a wholly owned subsidiary of HERALD.Bankers Day, July 2020Page 2

BUSINESS LINES IN MAINLAND CHINA AT A GLANCE.BMW AFCRETAIL FINANCECNY 89 BN.BMW AFCCOMMERCIAL FINANCECNY 13 BN.HERALDLEASINGCNY 12 BN.(Serviced Portfolio as of 12/2019)Bankers Day, July 2020Page 3

FINANCIAL SERVICES CHINACONTINUOUS BUSINESS GROWTH OVER PAST YEARS.SERVICED PORTFOLIO GROWTH(bn. CNY)BMW AFC 13%1212HeraldHERALD28192102952017201820192020 YTDQ2Retail FinanceNew Business (units)273,10039,83072Profit before Tax(mn. CNY)3,3383112016Return on Equity18.7%18.6%Penetration37.7%*5.4%RETAIL FINANCE SERVICED UNIT GROWTH(k. units)13(as of 12/2019)Bankers Day, July 202049BMW AFC45 20%788237142151058958720162017201820192020 YTDQ2* AFC Pene% Only.Page 4

VALUE PROPOSITION OF FINANCIAL SERVICESWITHIN THE BMW GROUP.SUPPORT OF SALES FINANCING PARTNERS OF BMW GROUP. STRENGTHEN AUTOMOTIVE BRANDS. ACCELERATE BMW DREAM.Bankers Day, July 2020CUSTOMER INTERFACE SERVICE AND LOYALIZE ALL BMWGROUP CUSTOMERS. WIN NEW CUSTOMERS.PROFIT CONTRIBUTION INDEPENDENT PROFITCONTRIBUTION TO BMW GROUP. RETURN ON EQUITY TARGET.Page 5

FINANCIAL SERVICES CHINAPROFITABILITY DEVELOPMENT.BMW AFC PROFIT BEFORE 20192020 YTD Q1HERALD LEASING PROFIT BEFORE TAX(mn.CNY)8431183201820192020 YTD Q1-542017Bankers Day, July 2020* One-time effects on PbT due to equity injection and lending quota control.Page 6

OPERATIONAL EFFICIENCY IS CONSTANTLY INCREASINGTHROUGH PROCESS AUTOMATION AND DIGITALIZATION.AUTO DECISION RATE (incl. AFC & HIL)Auto Approval Rate48,4%57,0%Auto Decline Rate62,2%2016Bankers Day, July 2020BMW AFCHerald4.27668,9%2.64129,3%4,6%COST PER CONTRACT DEVELOPMENT5,5%4,2%3,6%1,7%2017201820192020 YTD 020 YTD Q1Page 7

FINANCIAL SERVICES CHINASTABLE AND PRUDENT RISK PORTFOLIO. 80% PORTFOLIO OF CUSTOMERWITH VERY GOOD/GOOD CREDITRISK SITUATION REMAINS STABLE31-180 Days Delinquency RatioBMW AFCHerald0,23%Rating1-4,82%Rating1-4,80%BMW AFCRating 1-4Rating 50,08%Rating 7(2020 YTD Q2)Bankers Day, July 20200,06%0,14%0,22%0,10%0,03%HeraldRating 60,11%0,13%20162017201820192020 YTD Q2Page 8

CRISIS RESPONSE AND BUSINESS RAMP-UP.Delinquency Ratio (31-180 %0,3%0,2%0,1%0,0%JanFebMarAprPHASE I, II, I Business Ramp UpPhase I:Business Continuity: Bankers Day, July 2020Workforce protectionInitiate solutions tomitigate business impactand risksPhase II:Road to Recovery: Customer care incl.special policies andservicesDealer supportPhase III:Sustainable Growth: Enlarged product offers and jointcampaignsStrategy implementation tostrengthen competitive advantagePage 9

INVEST IN PEOPLE AND NEW TECHNOLOGY.EXCELLENCE IN CUSTOMER SERVICE.PEOPLE & COMPETENCIES(strategic talent development)OPERATION EFFICENCY(Automation andmixed sourcing strategy)ADVANCEDRISK ENGINE(data analytics inscorecard development)Bankers Day, July 2020EXCELLENTCUSTOMER SERVICES(24/7 A.I. Chatbot,Online Self Service)Page 10

OUR VISION: DIGITAL CHAMPION.Financial services integrated into a holistic group ecosystem across all channels andonline-to-offline touchpoints for a seamless personalized journey - anytime anywhere.Get what’s right for me.Become aware and fall in love.Enjoy my BMW world.Remember me - anytime & anywhere – with a Unique Customer ID across all oductsE-FINANCEBMW ECOSYSTEMPayment & ContractONLINEHandlingSELF-SERVICEGet Credit LimitSMARTRECOMMENDERPhysicalAI CHATBOTApplyLoan / LeaseSignContractWEBCALCULATORCREDIT LIMITINDICATORTest DriveGet FinalOfferHand-OverCustomer JourneyBankers Day, July 2020Page 11

TOGETHER WE ARE CONTINUING OUR JOINTSUCCESS STORY IN CHINA.SUPPORT OF SALESCUSTOMER INTERFACENEWEnlarged SF OfferCorporate Sales by Herald LeasingStrategic Role within the ValueChina of BMW Group ChinaBankers Day, July 2020NEWNEWStrengthen Operational Excellencevia RPA, OCR & new IT SystemNational Roll-out of eFinanceNEWPROFIT CONTRIBUTIONUpgraded A.I. Chatbot and Auto QCTechnology in Customer ServicesOmni-channel CampaignsNEWBalanced Risk PortfolioStable Profitability OutlookLegend: RPA: Robotic Process AutomationQC: Quality ControlOCR: Optical Character RecognitionPage 12

THANK YOU.Bankers Day, July 2020Page 13

National Roll-out of eFinance Omni-channel Campaigns Upgraded A.I. Chatbot and Auto QC Technology in Customer Services NEW Strengthen Operational Excellence via RPA, OCR & new IT System Balanced Risk Portfolio NEW Stable Profitability Outlook SUPPORT OF SALES CUSTOMER INTERFACE PROFIT CONTRIBUTION Bankers Day, July 2020 Page 12