The future of Financial Services in the automotive industry

Whitby, Ontario: During a recent workshop, Walter Schauer, President of BMW
Financial Services Canada, introduced some of the visions for the next five
years.

"Our vision is to have the uninterrupted virtual buying and financing process
for the customer", Walter Schauer explained and also went into detail on some
of the prerequisites that have to be met. "Of course, there has to be a
complete workflow process analysis. That means we don't only have to identify
every internal step, that is easy and already mostly done, but also the
external car purchasing process. In order to do so, we have to find out about
the motivations and desires of car buyers during the whole lifecycle."

Another big issue that has to be resolved before the vision can become reality
is the security on the Internet. BMW customers must be ensured the highest
level of security possible.

For the future, BMW Financial Services sees fuzzy logic and data mining as one
of the essentials to improving service for the customers. "A combination of
the financial status with the product preferences of a customer for instance
could be used to inform a customer about upcoming products. We know that this
sounds like the present, but what we really mean by it, is a perfect
match-system", explains Kelly Lam, Project Manager for BMW Infobahn.

For example, a customer will be offered a BMW X5 with sport package and beige
leather interior financed for 36 months with a $10,000 down payment. This
offer would be based on the customer's prior product selections that all had
beige interior and had the same product characteristics. The financing offer
would be based on the calculated trend of former financing models the customer
had chosen.

The financing offer would not be a statical construction, but it would adapt to
the changes, demands and possibilities of the customer. Especially for the
typical BMW customer, self employed, loyal to the brand and with over 30,000 km
per year, the financial offer would automatically adapt to the typical vehicle
usage.

For the customer, this will mean less paperwork and more financial options
catered to their needs, further reinforcing the slogan of BMW Financial
Services - Financing driven by you(TM).

The first steps in this direction have already been made. BMW Financial
Services reports the 100% implementation of the BMW InfoBahn Canada system.
BMW InfoBahn is an Internet based retailer application that enhances the buying
process for the customers by connecting all the Canadian retailers with BMW
headquarters.

"With our InfoBahn, we are the first manufacturer in the luxury segment
that entered the e-commerce stage to this extent", remarks Walter Schauer,
adding that the system is improving efficiency in the retail centres,
drastically decreasing time for information distribution and increasing
customer satisfaction.

The InfoBahn consists of several modules. The core is a credit approval system
that enables the sales representatives to check a customer's credit application
within a time period of approximately 10 minutes. "For
the most part, this is the timeframe the customer is still in the retail
centre, so there doesn't need to be a lot of mailing and paperwork', explains
Ian Smith, Sales & Marketing Manager for BMW Financial Services.

One other module is the Industry Information System that allows the posting of
up-to-date market information, so the retailer always has the most recent
information at his fingertips.

"In the long run, we will see that the customers who know the BMW product, will
use the uninterrupted virtual buying process to help facilitate the delivery of
the car, while new customers to the brand will enter the brand with the total
experience BMW offers - driving, financing and
servcing", says Walter Schauer. "This is a whole new chance for the sales
representatives to use their additional time on prospecting new customers,
while perfectly and efficiently serving the loyal owners."
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