BMW 2005 Annual Report Download - page 25

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A similarly noticeable increase (+5.2%) was
achieved in the area of used car financing. Most of
these contracts related to credit financing for used
BMW and MINI brand cars.
The number of retail-customer contracts under
management at the year-end, at 1,899,653, was
13.4% higher than one year earlier. The growth was
spread across all regions, with Europe showing the
fastest growth rate (+15.9%). The growth rates in
Germany, America and the Asian region were 13.7%,
11.5% and 12.2% respectively.
In the meantime, credit financing and leasing
are being marketed under the brand name “Alphera”
in 19 countries, either via multiple-brand dealerships
or directly by group companies. One advantage of
this is that it takes account of the growing need of
dealers to find financing solutions with a single busi-
ness partner. It also takes into account the growing
trend, particularly amongst younger customers, to
obtain financing via the Internet. Overall, Alphera’s
performance was very encouraging, with the number
of new contracts up by 13.2% to 51,760.
Higher added-value created by encouraging
customer loyalty
BMW and MINI brand customers who also have con-
tracts with the Financial Services segment, are sig-
nificantly more loyal to their brand than those paying
for vehicles outright. Various customer-related pro-
cesses defined by BMW Group Sales and the Finan-
cial Services segment were further developed glob-
ally in 2005 with a view to offering more in-depth
customer care. Joint customer care centres have
also been introduced; so far, they are already in
place in the USA, the United Kingdom, Australia and
New Zealand.
Continued growth in the area of dealer financing
High growth rates were again achieved in the area
of dealer financing, so that the total business volume
managed by the segment at the end of 2005
amounted to euro 7,080 million, giving a growth
rate of 25.3%. The number of contracts under
management at the end of the year rose by 12.0%
to 187,715.
The Financial Services segment’s in-depth
customer care and its diversified product range rein-
forced its position as the leading financing partner
of the BMW Group’s dealer organisation.
An example from North America demonstrates
the successful cooperation between financing com-
panies and the dealer organisation: the segment’s
financing companies in Canada and in the USA both
achieved first place in respective country-wide and
brand-neutral questionnaires relating to dealer satis-
faction.
Dynamic growth of fleet business
The BMW Group operates internationally in the area
of multi-brand fleet business via the Alphabet group
of companies. Customers are now being looked
after by Alphabet companies in 13 countries in the
areas of financing, full-service lease business and
fleet management.
The rapid growth seen in the previous year con-
tinued in 2005. The number of contracts managed
by Alphabet companies exceeded the 100,000 mark
for the first time ever during the first quarter of 2005
and 138,497 contracts were in place at the year-end,
39.8% more than one year earlier. This positive
development was helped by focusing consistently
on business with international customers; at the
year-end, these activities accounted for 21.2% of
the total business portfolio.
With an average growth rate for new business
over the last five years of 29.1%, Alphabet remains
one of the fastest growing full-service providers in
this market segment.
Group Management Report 8
A Review of the Financial Year 8
The General Economic Environment 11
Review of operations 15
BMW Stock in 2005 38
Financial Analysis 41
--Internal Management System 41
--Earnings performance 42
--Financial position 45
--Net assets position 46
--Subsequent events report 49
--Value added statement 49
--Key performance figures 51
--Comments on BMW AG 52
Risk Management 56
Outlook 60