MENU
SEARCH
Germany's BMW Group plans to buy the car-leasing unit of Dutch banking group ING for around $1 billion to expand its own fleet division and to support its budding electric car business.
The acquisition of ING Car Lease for 637 million euros will increase the number of car contracts under management by BMW's Alphabet Fleet Management from 300,000, serving more than 12,000 customers, to around 540,000, BMW said Friday.
"Fleet management will also support the introduction of electric vehicles," said Norbert van den Eijnden, chief of Alphabet.
Analysts say automakers rolling out all-electric and other high-tech cars will rely increasingly on their leasing operations, reported The Detroit News.
Most people will be reluctant to buy the early electric cars because of concerns about their residual values. "Why buy a first-generation electric car when you know the technology is likely to be obsolete in three-four years?" said auto consultant Maryann Keller of Maryann Keller & Associates in Stamford, Conn. "It's easier to get people to make a monthly payment."
It's also easier for automakers with their own leasing operations to subsidize the cost of battery-powered electric vehicles. That way, they can put as many customers as they want behind the wheel and see how the cars perform, Keller said.
BMW has leased electric Mini cars and has developed a BMW-badged ActiveE electric car.
At the same time, European companies with vehicle fleets also are under pressure to curb carbon dioxide emissions.
"We currently see many automakers putting more focus on fleet management," Deutsche Bank analyst Tim Rokossa said in a research note today.
The commercial fleet business is important in Europe, where company cars are often part of executive compensation.
"The strengthening of the fleet management business is in line with the BMW Group strategy to be the leading provider of premium products and premium services," BMW said.
It said the deal with ING was expected to close in the fourth quarter of 2011.
Deutsche Bank noted that BMW, based in Munich, had 12.5 billion euros, or $17.5 billion, in cash from industrial operations, at the end of the first quarter. "As such BMW has in our view enough cash to easily digest this acquisition," Rokossa said.
Dealers should aim to build a positive work environment, helping employees execute an efficient experience, from their online research to the final delivery of the vehicle.
Read More →
A cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.
Read More →
A recent price spike due to several larger market forces, though it hasn’t dulled demand, is pushing more consumers to efficient models to squeeze in buys.
Read More →
A group out West picked up the major D.C.-area collection, putting it in the upper tiers of private automotive groups in the U.S.
Read More →
Lenders loosened access for subprime borrowers, and consumers with negative equity reached a record high, Cox Automotive reported.
Read More →
U.S. consumer interest in electric vehicles lags behind other countries despite the rising gas prices caused by the ongoing war in the Middle East.
Read More →
Research reveals the brands and models most likely to have higher recall rates over their lifetimes. While some brands rank high, addressing safety issues can be a selling point.
Read More →
Cox Automotive data shows Americans doubled down on big-is-better despite price increases. Slightly higher incentives helped fuel the demand.
Read More →
Cox Automotive research shows both the opportunities and the challenges in turning consumers’ growing affordability needs into increased fixed-operations revenue.
Read More →
The partner you choose for growth and expansion is key, because better is the ultimate goal instead of growth for growth’s sake.
Read More →