BMW To Move Into UK Financial Markets

UK credit card and insurance companies face fresh competition in their markets as German car-manufacturer, BMW, has decided to enter the mainstream financial markets by offering credit cards, savings and insurance products.

This won’t be the car giant’s first foray into the world of mainstream financial products and services as they have enjoyed recent success in the US and Australian markets, whilst offering credit cards in Spain, Austria, Germany, Thailand, New Zealand and Japan.

So far, the German carmaker’s UK financial; services division has limited itself to offering just car finance and leasing products.

BMW is looking to enter the UK credit card market in conjunction with credit card giants’ American Express, and will offer BMW and Mini credit cards.

To ease their entry into the UK’s financial services and products markets, BMW will hook up with various large financial players. They will offer branded savings and bond products in conjunction with Newcastle Building Society and will offer home insurance through UK Insurance, who are part of the Royal Bank of Scotland.

BMW’s venture into financial services and products shouldn’t come as a surprise as many German car manufacturers have long appreciated the benefits and profit reliability that they bring.

BMW also hope to boost their car sales through their financial products by offering customers unique incentives. Likewise, BMW customers and car owners will also be offered incentives to take out one of their financial products.

Keith Dye, chief executive of BMW Financial Services GB, said: “ We are extending our range of financial services products in our key sales markets and as the third largest market we see the UK playing an important part in this global strategy.”

Through the information stored by their financial services arm, BMW will gain further insight into the customer base, as they will be privy to customers’ personal information. This will enable the German carmaker to concentrate the advertising and promotions more effectively.

BMW first entered the credit card market in 1997 when they offered credit cards in their homeland. Since then they have drawn up serious strategies with a view to offering broader personal financial products.

Alisdair Milton
30th May 2006

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