BMW 2006 Annual Report Download - page 24

23
Financial Services segment completes
successful year
The Financial Services segment continued to grow
profitably in 2006, again making an important con-
tribution to the overall performance of the BMW
Group. The business volume of the segment in bal-
ance sheet terms rose by 8.9% to euro 44,010 mil-
lion. Adjusted for exchange rate impact, the increase
would have been as much as 14.4%. At the year-
end, 2,270,528 lease and financing contracts were
in place with dealers and retail customers, equivalent
to a growth of 8.8% in comparison with one year
earlier.The proportion of new cars of the BMW Group
leased or financed by the Financial Services seg-
ment was 42.4%, 1.3 percentage points above the
proportion recorded in 2005.
Regional expansion continuing
The business activities of the Financial Services
seg-
ment were further expanded over the course of 2006
with four new ventures based on cooperation agree-
ments in Bulgaria, Kuwait, Romania and Slovenia.
In addition, a newly founded unit started opera-
tions in Greece, offering financing services to retail
customers and dealers. In total, the Financial Ser-
vices segment looks after customers in more than
50 markets, either with its own companies or in
the form of ventures based on cooperation agree-
ments.
Retail customer business again up on the
previous year
Finance and leasing business with retail customers,
the segment’s largest line of business, was also ex-
panded in 2006. In total, new contracts were signed
with retail customers with the value of euro 24,449
million, representing a 4.0% increase over the
pre-
vious year. This corresponds to 916,005 new con-
tracts, or 5.7% more than in 2005. Approximately
63% of these contracts related to new vehicles
manufactured by the BMW Group.
The increase in the number of new contracts
was attributable to credit financing (+7.3%) and
leasing (+ 3.1%). At 31 December 2006, leases
accounted for 37.4% of all new retail customer con-
tracts, roughly maintaining the level of the previous
year.In the area of used car financing, the number
of new contracts increased by 3.1%. Most of these
were related to the credit financing of used BMW
and MINI brand cars.
The number of contracts in place with retail
customers at the year-end rose to 2,076,312 units,
9.3% above the previous year’s figure. Growth was
recorded in all regions. The portfolio of retail cus-
tomer business contracts was up by 4.4% in Ger-
many, by15.1% in the remaining European markets
and by10.7% for the markets in the Asia/Oceania/
Africa region.The largest proportion of the world-
wide contract portfolio again related to the Americas
region; the number of contracts there increased by
8.0% to a total of 681,623 units.
Multiple-brand financing on growth course
The multiple-brand financing line of business con-
tinued to make good progress in 2006. In the mean-
time, credit financing and leasing are being marketed
under the brand name “Alphera” in as many as 21
countries, either via multiple-brand dealerships or
directly by group companies.
On the one hand, the year under report was
influenced by geographical expansion, including
within the USA. In addition, organisational structures
and IT systems were enhanced at the level of the
group’s national companies, thus laying the founda-
tion for further growth. Compared to the previous
year, new business grew by a very pleasing 17.8%
in 2006 to more than 60,000 contracts.
Contract portfolio of BMW Group Financial Services
in 1,000 units
2,400
2,200
2,000
1,800
1,600
1,400
1,200
02
1,443
03
1,623
04
1,843
05
2,087
06
2,271
Contract portfolio retail customer financing of
BMW Group Financial Services 2006
as a percentage by region
America
Rest of Europe
Germany
Asia/Oceania/Africa
28.4
32.8
13.2 25.6