BMW to lend €100m to new buyers as firm enters car finance market
GERMAN car giant BMW hopes to lend up to €100m to the Irish market next year after securing approval to open a Dublin-based finance operation.
BMW Financial Services Ireland boss Philip Kerry revealed the forecast yesterday and insisted the market for car finance was sound in Ireland despite the recession.
"We've been taking applications for about 10 days now and we've already had well over 250 people, most of them excellent credit risks," said Mr Kerry.
"Our view would be that the Irish public has already been through a pretty good stress test (over the recession). . . and 87pc of the population are still in jobs."
The operation will lend to the 12 BMW and Mini dealerships in Ireland, replacing a six-year arrangement between BMW and Permanent TSB.
Mr Kerry stressed that BMW's decision to branch into lending here was part of a global finance strategy and not solely driven by Irish banks' refusal to lend for car purchases.
"It does make for a better starting point though," he said, pointing to the lower levels of credit available from traditional banks and the exit of motor finance companies.
The operation was "absolutely" a long-term play not a short term measure to stimulate demand for BMWs and Minis during the recession, Mr Kerry added.
BMW Financial Services Ireland operation got its licence from the Central Bank on November 22 and will advance its first funds in January to fuel the purchases of 2011 cars.