debt
BMW Financial Services has announced second quarter before-tax
profits of €64m (£50m), a fall of 66.1 per cent from Q2 2007.
Before-tax profits for H1 stand at €148m (£115m), 60.2 per cent
below the previous year’s first half total.
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This drop has been partially ascribed to “additional expense
recognised for residual value risks and bad debts”, totalled at
€245m (£191m) in the BMW Group’s quarterly financial report.
Nevertheless, as of June 30 2008, 2,806,776 lease and financing
contracts were in place with dealers and retail customers
worldwide, corresponding to a year-on-year growth rate of 12.9 per
cent. BMW Financial Services’ business volume in balance sheet
terms grew by 8.8 per cent to reach €53.1bn (£41.4bn) at June 30
2008.
The proportion of new vehicles leased or financed by BMW Financial
Services during the first half of 2008 was 46.4 per cent, 2.4 per
cent higher than in the corresponding period in 2007. The leasing
to loans ratio stood at 35:65 for new contracts signed. Numbers of
contracts for used car finance grew by 27 per cent, while its
insurance contract portfolio grew by 20.4 per cent, to 1.1m
contracts.
The total volume of finance and lease contracts signed with retail
customers during H1 was €14.8bn (£11.5bn) – an increase of 6.9 per
cent on the same period last year.
The Financial Services division also announced an 11.1 per cent
year-on-year growth in volume of dealer financing contracts,
totalling €8.8bn (£6.9bn).
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By GlobalDataDuring the reporting period, the captive started offering finance
products to BMW customers in Estonia, Latvia and Lithuania thanks
to a link-up with Nordea Finance, a subsidiary of Nordea Bank. It
also received a banking licence for Russia, enabling the BMW Group
to start retail consumer and dealer finance from July. And after
signing in May a joint venture framework agreement with a Chinese
company, BMW Brilliance Automotive Ltd, Shenyang, the captive’s
products and services are soon to be offered to Chinese
carbuyers.
Fred Crawley
