BMW 2010 Annual Report Download - page 28

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12 GROUP MANAGEMENT REPORT
12 A Review of the Financial Year
14 General Economic Environment
18 Review of Operations
41 BMW Group – Capital Market
Activities
44 Disclosures relevant for takeovers
and explanatory comments
47 Financial Analysis
47 Internal Management System
49 Earnings Performance
51 Financial Position
53 Net Assets Position
55 Subsequent Events Report
55 Value Added Statement
57 Key Performance Figures
58 Comments on BMW AG
62 Internal Control System and
explanatory comments
63 Risk Management
70 Outlook
managed at the end of the reporting period, 7.7% fewer
than one year earlier. The number of financing contracts
was slightly up on the previous year. The number of
service contracts without a financing element was strate-
gically reduced.
By contrast, targeted measures were undertaken to grow
multi-brand financing business which consequently
surged by 45.4% with a total of 122,840 new contracts.
Europe accounted for the largest proportion of these ad-
ditions. This line of business was also expanded to
in-
clude the Russian Federation in 2010. Following this move,
credit financing, leasing and other products are now mar-
keted to retail customers via dealerships in 22 markets
under the brand name “Alphera”.
Increase in dealer financing
The Financial Services segment is a strong and reliable
partner, providing a well-designed range of financing
products to the dealer organisation. Dealer financing ac-
counted for a business volume of euro 10,154 million
at31 December 2010, 7.7% up on the previous year.
Deposit business expanded
One aspect of the expansion of the BMW Bank is that
increased deposit volumes will serve as an additional re-
financing source for the Financial Services segment. The
volume of deposits worldwide rose by 7.6% during the
year under report to stand at euro 10,688 million. The
number of securities custodian accounts under manage-
ment decreased to 24,471 at the end of the reporting
period (–9.4%). Credit card business was slightly down
by 0.7% on the previous year to 293,266 contracts.
Sharp rise in insurance business
As a supplement to our credit financing and leasing
products, we also offer a range of car, residual liability,
warranty and other vehicle-related insurance policies to
customers in more than 30 markets. Demand for insur-
ance products remains high, reflected in an 18.1% rise in
the number of new contracts signed (689,928 contracts).
At 31 December 2010 a total of 1,571,708 insurance con-
tracts were in place (+12.8%). This growth was partially
a result of the new strategic direction pursued for this
line of business in the USA. Further growth opportunities
are being opened up, particularly in the emerging mar-
kets of Asia and in the form of cooperation arrangements
with Allianz SE.
Risk situation significantly eased
The improved economic situation on the markets also
helped to ease the risk situation significantly. Risk-mitigat-
ing
measures taken in the area of receivables manage-
financial service providers in the category “Retail Cus-
tomer Credit Business”. These awards are the visible result
of our rigorous focus on providing our customers with
the best possible service.
Expansion of BMW Bank continued in line with plan
By expanding the BMW Bank into a credit institution with
operations across Europe, the Financial Services seg-
ment
is increasing the flexibility with which it can manage
liquidity. In conjunction with the BMW Group EU pass-
port project, the previously legally separate segment en-
tity in Spain was transformed into a branch of the BMW
Bank in 2009. During the year under report, integration
of the Group’s Italian financial services entity was suc-
cessfully completed with the creation of a banking group.
The BMW Bank had previously taken the EU passport
route to set up a branch in Portugal. Further entities will
be integrated in the BMW Bank in coming years.
Operations started in growth markets
Regional expansion in the BMW Group’s principal growth
markets was continued during the year under report. In
September the Chinese Banking Regulatory
Commis-
sion granted a licence to the BMW Group, entitling a
joint venture to commence business operations in China.
Operational activities commenced in India in October.
Cooperation arrangements were also put in place with lo-
cal financial services providers in selected markets.
Fleet business volumes slightly down, dynamic growth
for multi-brand financing
The BMW Group operates its international multi-brand
fleet business under the brand name “Alphabet”. In total,
a portfolio of 301,284 fleet vehicle contracts were being
Contract portfolio retail customer financing of
BMW Group Financial Services 2010
as a percentage by region
Europe 52.8 Asia / Oceania / Africa 12.7
Americas 34.5
Americas Europe
Asia / Oceania / Africa