BMW 2005 Annual Report Download - page 15

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The Asian markets remained dynamic in 2005.
The Chinese automobile market quickly passed
through the temporary dip in the growth rate seen
at the beginning of the year and then returned to
robust growth, so that the average annual growth
rate was in the region of 25%.The Indian market is
now the third largest market in the Asian region
after Japan and China; although the Indian market
developed somewhat more moderately than in
recent years, it was still able to register a growth
rate of 6.5%. The South Korean market, which had
contracted enormously in recent years, recovered
on the back of a modest cyclical upturn in 2005 and
even finished the year with an average growth rate
of 7.3%. By contrast, the cyclical upturn in Japan
did not have any impact on total car sales volumes;
compared to the previous year, the number of new
registrations stagnated due to a weak performance
in the second half of the year.
The growth rates recorded in the Latin American
markets were somewhat lower that those seen in
the previous year. After doubling in 2004 from a low
level, new registrations in Argentina rose again in
2005 by almost 30%. In Brazil, a growth rate of al-
most 10% was again achieved in 2005.
Motorcycle markets in 2005
The global market for motorcycles grew in 2005 by
approximately 7%. The 500 cc plus motorcycles
segment relevant for the BMW Group grew world-
wide by 4.4%.
The total volume sold in this segment in Ger-
many fell by 7.4% in 2005, the sixth annual de-
crease in succession; the markets in Italy and the
United Kingdom were just about on a level with
the previous year. At 37.9%, Spain saw the most
pronounced increase in new registrations of motor-
cycles in the 500 cc plus class.
The corresponding market in the USA grew
by 7.2% in 2005, with the largest proportion of this
growth registered by the Supersport and Cruiser
segments.
Business environment for financial services
in 2005
Financial services business in 2005 was influenced,
as expected, by the increase in interest rates on
the money and capital markets, in particular in the
USA and the euro region, and by the tighter mone-
tary policies pursued by the world’s main central
banks. During 2005, the US Federal Reserve Bank
increased key lending rates in several steps from
2.25% to 4.25%. This, in conjunction with the un-
usually low interest rates at the long end of the US
dollar interest rate curve, resulted in a significantly
flatter interest rate curve. In the euro region, the first
interest rate increase (up to 2.25%) took place in
December 2005 after a period of historically low key
lending rates. In addition, the market for car-related
financial services was characterised by an increas-
ingly intense level of competition.
Group Management Report 8
A Review of the Financial Year 8
The General Economic Environment 11
Review of operations 15
BMW Stock in 2005 38
Financial Analysis 41
--Internal Management System 41
--Earnings performance 42
--Financial position 45
--Net assets position 46
--Subsequent events report 49
--Value added statement 49
--Key performance figures 51
--Comments on BMW AG 52
Risk Management 56
Outlook 60