First quarter pre-tax profit at BMW Financial
Services grew marginally year-on-year but dropped as a proportion
of the automotive manufacturer’s group profit.
Profit for BMW’s financing division was €434m,
up 1.17%, year-on-year, but down as proportion of BMW’s total
profit to 20.91%, from 25.15%.
Go deeper with GlobalData
Both revenue from financial services and the
contribution of finance to total revenue of the BMW Group were up,
year-on-year, according to the company’s first quarterly results of
2012.
BMW FS recorded revenues of €4,800m (£3.9bn)
from January to March this year, up 14.75% on the same period in
2011, making up 26.24% of Group revenue, up from 26.08%
in Q1 2011.
Penetration, used vehicle finance
down
At 31 March 2012, BMW FS was managing
3,646,111 lease and finance contracts worldwide, up 12.8%,
year-on-year, and up 1.5% from the 3,592,093 contracts being
managed at the end of 2011.
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By GlobalDataThe figure includes 260,038 contracts of the
ICL Group, acquired
during Q3 2011, up 2.83% from the 2011 year-end total of
252,870 contracts.
Business volume for the quarter was €74,720m,
down 0.7% from Q1 2011 and also down 0.7% from the Q4 2011 total of
€75,245m.
BMW FS added 305,984 (or 10.5%) new retail
financing and lease contracts in the quarter, including 22,367
contracts from ICL Group, with a penetration rate of 38.2%, down
from 40% in Q1 2011, and down from 41.1% across the calendar
year.
Used vehicle financing was also down
year-on-year by 10%, totalling 72,143 between the BMW and Mini
brands, and slightly down from the quarterly average of 2011 when
BMW FS wrote 301,539 new contracts.
The total volume of vehicle finance in the
quarter, including retail, was €8,274m, up 12.2%, year-on-year, and
slightly up from the quarterly average of the 2011 total of
€31,779; a similar position to that
reported by the Renault-Nissan Alliance whereby the volume of
finance was up but number of contracts down.
Divisions in car finance
The BMW FS total motor finance portfolio,
including the ICL contracts, accounted for 3,365,056 contracts at
quarter’s end, up 13.4%, year-on-year, with growth in all regions,
including 43% in Europe/Middle East and 3.3% in (what BMW terms) EU
Bank.
New multi-brand financing business rose 12.5%
to 37,691 units and the multi-brand contract portfolio now stands
at 384,834, up 9.2% on Q1 2011 and up 3.73% since the end of the
last quarter.
Total volume of dealer financing was €11,317m;
11.5% up, year-on-year, 0.88% down 0.88%, quarter-on-quarter.
Anti-austerity
The financial outlook from BMW Group was
dismissive of many national austerity measures, saying: “Endeavours
to consolidate state finances are likely to have a negative impact
on economic performance in the near future” in nations such as the
UK, although “the UK is forecast to grow by approximately 0.3 % in
the current year since the government commenced its public-sector
spending consolidation measures at a very early stage.”
The report also noted favourable conditions in
European financial markets aided by the supply of liquidity ensured
by the European Central Bank, given little rise in inflation.
Expanding austerity packages would also mean
reduced risk spreads and lower refinancing costs for financial
services providers during a quarter when, when used car markets
remained stable, except in southern Europe.
BMW Group predicted bad debt rates to improve,
residual values to become an increasing risk in Europe (compared to
the USA), and a return on equity of at least 18%.
richard.brown@vrlfinancialnews.com
