BMW's competitors may be surging, but BMW is fighting back with 16 new or refreshed products this year. The hot i8 hybrid sports car will launch next month. Source: BMW Group

BMW (BAMXF -0.77%)held its 94th annual meeting of shareholders last week. There wasn't a lot of major news to report aside from a nice boost in dividends, but BMW's Chairman, Dr. Norbert Reithofer, made a speech that's worth a closer look.

Reithofer explained how BMW plans to boost its profits while investing heavily in future growth -- and how it plans to confront the growing competitive threat from its longtime German rivals. As the Motley Fool's senior auto specialist, John Rosevear, notes in this video, BMW's plan relies heavily on new green technologies -- an interesting move for a company long associated with luxury and performance.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto specialist for fool dot com. BMW's annual shareholders' meeting was held this past Thursday, the company's 94th annual meeting in fact. BMW Chairman Dr. Norbert Reithofer made a speech at that meeting that's worth a closer look. 

He started by reviewing BMW's 2013 results in detail, and there's not much that's newsworthy there except to say that BMW will be paying its highest annual dividend ever, 2.60 euros per share of common stock and 2.62 euros on preferred shares, and the overall payout of 1.71 billion euros represents 32% of BMW's net profit for the year.

After dropping that happy news, Reithofer went into BMW's outlook for 2014.

He stood by previous guidance. BMW expects to sell more than two million cars in 2014, that includes sales for the whole BMW Group, the BMW, Mini, and Rolls Royce brands. He expects pre-tax profits to be significantly above the 7.9 billion euros that BMW made in 2013, that's about $10.8 billion dollars, and he expects BMW's automotive unit to have an operating margin between eight and 10%.

They're going to do that to some extent by riding the growth they expect to see in key markets, Reithofer said. He expects demand to be up in North America and Asia, and said that, and I quote, "the downturn in the European markets seems to be over." That's key for BMW, which still gets 44% of its sales from Europe.

But we've also heard that BMW is investing heavily in new products and advanced technologies, and Reithofer acknowledged that. He said that BMW's capital spending last year was about 6.7 billion euros, or 8.8% of revenues. BMW's standing target for capex is 7% of revenue, but he said that spending will be above that ratio in 2014, and probably until 2016, though it'll fall closer to 7% over time.

What are they spending that on? Well, one big priority for BMW, as with every other automaker, is reducing environmental impact. Reithofer announced two new targets along those lines: By 2020, BMW is aiming to lower the CO2 emissions of its European model lineup by at least 50 percent from where they were in 1995, and to reduce what he called "resource consumption" in manufacturing by 45% from 2006 levels, also by 2020.

He also said that the lessons learned from building the i3 electric car and the i8 hybrid sports car are already making their way into other models, for instance the extensive use of carbon fiber, he said that the next-generation 7 Series would use carbon fiber and that -- again, this is a quote -- "its low weight will set a very high standard for the segment."

This is all good, but of course BMW is under intense pressure from its two big German rivals, Mercedes-Benz and Audi, both of which have said that they want to pass BMW in total sales in the next several years. BMW remains the global luxury-car sales leader, but both Audi and Mercedes have gained this year, and Audi is launching 17 new or refreshed models this year, while Mercedes is riding a lot of momentum from its all-new S-Class and CLA-Class models introduced last year. 

But BMW has 16 new or refreshed models of its own coming in 2014, including that i8 sports car which will launch around the world in June. So the battle here is heating up, but BMW is sticking by its optimistic goals for 2014. Thanks for watching.