Full-year results were a mixed bag for the global finance operations of both BMW Financial Services (BMW FS) and Volkswagen Financial Services (VWFS).
BMW FS recorded a growth in revenues, but profit before tax dropped year-on-year, while VWFS saw its return on equity drop at the same time as both operating profit and contribution to Volkswagen Group’s overall profit grew.
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Revenue at BMW FS, the global finance operation of the BMW Group, was 19.55bn (£16.76bn) for the year, up by 11.65% on the figure for 2011, while profit before tax was 1.56m, down 12.79%. BMW attributed the fall to an exceptionally profitable 2011, including 439m from the reduction in provision for residual value and bad debt risks.
2012, however, included 124m profit from end-of-contract leasing vehicles. 1,341,296 new lease and credit financing contracts were signed in 2012, up 12.09% on the total for 2011. At the end of 2012, the rolling total of contracts in the BMW FS portfolio stood at 3,846,364, up 7.08% on the total at the close of 2011.
Worldwide, return on equity for the financial services division of the Volkswagen Group was 13.1% for 2012, down from 14% in 2011.
Operating profit at VWFS was 1.4bn (£1.2bn), up 16.7% on 2011, with 3.8 million finance, leasing and service / insurance contracts added to the portfolio in 2012.
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By GlobalDataGlobally, the proportion of the Group’s consolidated operating prof it coming from VWFS stood at 9.21% for 2012, up f rom 8.63% the
year before.
The consolidated operating prof it for the group was 11.5bn, up 2% year-on-year, plus 3.7bn operating profit, up 42.3%, from joint ventures held in China, including Volkswagen Finance China, where finance penetration for the Group has risen from an estimated
6-7% i n 2006 to 15-16% in 2012.
Sales revenue for the Group was 192.7bn, up 20.97% year-on-year, with profit before tax up 34.7% to 25.5bn and profit after tax up38.5% to 21.9bn.
BMW Group said BMW FS had continued to hit return-onequity targets and will soon be the "point of contact" between brand and customer.
Friedrich Eichiner, board member for finance at BMW, explained the Group plans to enhance the role of BMW FS "as a service provider" and make the finance provider the "customer’s point of contact for the BMW Group".
The Group added its finance arm is "expected to put in another strong performance" in 2013, according to a BMW Group statement, although the Group announced it was only "cautiously optimistic" about 2013, overall.
Meanwhile, Volkswagen Group has said it expects VWFS, Europe’s largest vehicle leasing firm by business volume, to deliver the same level of operating profit in 2013 as 2012. VWFS, Volkswagen Passenger Cars, and VW’s commercial vehicle and power engineering businesses are all expected to do no better than hold steady this year due to an "on-going uncertainty in the economic environment."
richard.brown@timetric.com
