BMW 2008 Annual Report Download - page 27

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14 Group Management Report
14 A Review of the Financial Year
16 General Economic Environment
20 Review of Operations
42 BMW Stock and Bonds
45 Disclosures pursuant to § 289 (4)
and § 315 (4) HGB
47 Financial Analysis
47 Internal Management System
49 Earnings Performance
51 Financial Position
52 Net Assets Position
55 Subsequent Events Report
55 Value Added Statement
57 Key Performance Figures
58 Comments on BMW AG
62 Risk Management
68 Outlook
Contract portfolio retail customer financing of
BMW Group Financial Services 
as a percentage by region
America 32.9 Germany 26.6
Rest of Europe 27.5 Asia / Oceania / Africa 13.0
America
Rest of Europe
Germany
Asia / Oceania / Africa
to constitute the largest proportion of the contract portfo-
lio. Here, the growth rate compared to one year earlier was
.  .
Dealer financing volumes up
The Financial Services segment supports the BMW Group
dealer organisation with a comprehensive range of prod-
ucts. Dealer financing business increased in . At  De-
cember , the managed business volume stood at euro
, million, up .  against the previous year. In total,
, dealer financing contracts were in place at the end
of the reporting period.
Multi-brand financing business up on
previous year
The multi-brand financing line of business was further ex-
panded in . Under the brand name “Alphera”, credit
financing, leasing and other products are marketed to retail
customers via dealerships in  markets. In the previous
year, the “up2drive” brand name was successfully intro-
duced for direct business. This sales channel was further
expanded in four markets during the year under report.
In total, , new business multi-brand financing con-
tracts were signed in , .  more than in the previous
year. The largest proportion of new contracts related to the
Americas and Asia / Oceania / Africa regions.
Fleet business continues to grow
The BMW Group’s international brand-neutral fleet busi-
ness operates in the fields of financing, full-service leasing
and fleet management, offering its services under the
brand name
“Alphabet”. The contract portfolio for fleet
business continued to grow in  despite difficult mar-
ket conditions. At the end of the reporting period, fifteen
Alphabet fleet management entities were managing a
portfolio of , contracts worldwide, .  more than
one year earlier. Alphabet was thus able to strengthen its
market position further.
Sharp volume rise in deposit business
Despite the difficult climate caused by the financial and
economic crisis, the Financial Services segment’s deposit
volume totalled euro , million at the end of the report-
ing period. This was .  higher than the level one year
earlier.
The number of securities custodian accounts maintained
at the end of the reporting period totalled ,, roughly in
line with the previous year (– .  ).
Credit card business could not be maintained at the pre-
vious year’s level. The managed portfolio comprised
, BMW and MINI credit cards at  December ,
a decrease of .  . The BMW Card is included in the
product portfolio in ten countries and the MINI Card in four.
Growth in insurance business
In addition to credit financing and lease business, the Finan-
cial
Services segment also operates as an agent for vehi-
cle and mobility-related insurance products in more than
 markets. In this context, the Financial Services segment
maintains cooperative arrangements with local insurance
companies. The internationalisation of the retail customer
insurance line of business was continued in . The range
of combined insurance and financing products was ex-
panded and adapted to meet a growing demand amongst
customers for one-stop solutions.
The outcome of these measures was that the number of
new business insurance contracts increased by . 
to , contracts. During the course of , the port-
folio of insurance contracts exceeded the one million mark
for the first time. ,, contracts were in place at  De-
cember , .  more than at the end of the previous
year.
Financial and economic crisis influences risk
situation
Credit and lease business was exposed to a higher level of
credit risk in . Compared to the previous year, the bad
debts ratio rose by  basis points to .  .