Bayerische Motoren Werke (BMW) AG, the world's largest maker of luxury cars, will start selling auto insurance for Allianz SE, Europe's biggest insurer, to boost profit and get more revenue from car sales.
BMW will offer traditional auto insurance as well as products that provide for monthly payments if finances become tight and guarantee a car's value in the event of an accident, the Munich- based automaker said today.
"We see a lot of potential in the cooperation with Allianz," Michael Rebstock, a BMW spokesman, said in a telephone interview. "Ideally, we'll be able to sell every leasing customer an insurance policy."
The cooperation with Allianz, which is also based in Munich, comes as auto companies reassess their business in light of the worst industry crisis since World War II. Manufacturers are looking at ways to sell services, rather than just cars, to stabilize revenues and get a larger slice of consumer spending on transport.
Daimler AG, the maker of Mercedes-Benz cars, for instance, will expand its car2go car-sharing project to Austin, Texas, later this year. The Stuttgart, Germany-based automaker began testing car2go in Ulm, Germany, in March. The 200 Smart mini- cars in the southern German city are available to rent spontaneously for 19 cents a minute, including taxes, insurance and fuel.
In the cooperation with Allianz, BMW aims to expand the range of services it offers leasing customers, which account for about 50 percent of the automaker's sales. The cooperation should help BMW achieve its 2012 profit goals, Rebstock said.
The manufacturer, which also makes Mini and Rolls-Royce vehicles, is targeting a return on sales from its automotive business of 8 percent to 10 percent three years from now. Automotive operating profit was 1.4 percent of revenue in 2008.
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