Marktanalyse - Consumer Automotive Financial Services in Brazil

Marktanalyse - 'Consumer Automotive Financial Services in Brazil'

Consumer Automotive Financial Services in Brazil investigates the market for automotive financial services linked to sales of new and used passenger cars in Brazil. In addition to analysing the market for finance and leasing services, the study also covers creditor insurance, motor insurance and road assistance, and demonstrates the extent to which a market exists for extended warranties and GAP insurance. Using survey results for average take-up rates for finance and leasing propositions at the point of sale, data for the size and growth of the automotive finance and leasing market for consumers in Brazil is provided in terms of gross advances and assets leased for 2007 to 2011 with splits between finance for new and used cars and between finance organised through dealerships at the point of sale and directly with banks or other lending institutions. Moreover, also by means of data for average take-up rates, the markets for creditor insurance, motor insurance, road assistance, extended warranties and GAP insurance are sized in terms of gross written premiums and other revenues sold through the automotive trade (i.e. via dealers and manufacturers) in 2011. These are broken down between new and used cars and between new contracts sold during 2011 and in-force business sold in previous years but still being renewed in 2011. The report draws on a survey of over 80 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of over 40 automotive brands in Brazil. The PartnerBASE™ database that accompanies the report details each of the marketing initiatives for consumer automotive financial services traced by Finaccord for both dealers and manufacturers. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Brazil.

Inhaltsverzeichnis Marktanalyse 'Consumer Automotive Financial Services in Brazil'



TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY .. 1

1.0 INTRODUCTION 3

What is this report about? .... 3

The focus of the report is on financial services related to the sale of passenger cars to individuals . 3

Rationale . 3

The provision of financial services is essential to support both car sales and profitability... .... 3

… with huge diversity in these services between countries and products…... 3

… which have yet to be explored in detail . 3

Methodology 4

Survey of dealers and manufacturers ... 4

Market data ... 2

Computation of market data is based on a complex set of assumptions and variables… . 2

…in order to provide market segmentations in unrivalled detail .. 2

Definitions .... 2

Finance and leasing products 2

Insurance, warranty and assistance products 3

Captive, internal and tied providers . 3

Abbreviations 4

PartnerBASE™ 4

Finaccord 4

2.0 MARKET ANALYSIS .. 6

Introduction .. 6

Passenger vehicle data .. 7

The number of new passenger cars sold in Brazil is rising at more than 8% per annum... 7

...whilst the numerically significant used car market also remains positive 7

Fiat, Volkswagen and Chevrolet each hold a large segment of the Brazilian market .... 9

Consumer automotive finance and leasing market ... 10

Market size and growth .. 10

The volume of finance and leasing contracts is growing at around 6% per annum… . 10

…and used car loans issued at the point of sale are an important part of this picture . 10

The value of all types of finance and leasing contracts is increasing….... 11

…but the quickest growth relates to direct lending for new car purchases ... 11

Types of finance and leasing product . 13

‘Consortium loans’ are an interesting feature of the Brazilian market . 13

Consumer automotive insurance, warranty and assistance markets .... 14

Market sizes 14

Motor policies and creditor insurance together account for more than 90% of all revenues . 14

Policyholders are able to choose, and vary, the amount of GAP coverage they require . 14

Extended warranties are popular in Brazil, but they generate much less revenue than creditor insurance .. 14

Types of creditor insurance policy . 17

Virtually all creditor policies intermediated by dealers cover a broad range of risks .... 17

Types of motor insurance policy .... 18

In Brazil, hardly any dealers distribute third-party liability-only policies 18

Automotive dealer survey .. 19

Provision of consumer automotive financial services . 19

Several products are universally available, but less than half of dealers offer extended warranties .... 19

Number and nature of schemes .... 20

Consumer uptake of automotive financial services .... 22

Uptake of motor insurance at the point of sale is relatively low, in spite of universal availability 22

Brazil has the highest uptake of extended warranties among new car purchasers 22

Nearly half of finance and leasing customers also acquire creditor insurance at the point of sale . 22

Competitor dynamics: dealer partnerships ... 24

Finance and leasing: widespread multiple partnerships create a market with several key players 24

Creditor insurance: underwriters partner directly with lenders rather than with car dealers .. 26

Motor and GAP insurance: in-house brokers (both captive and external) account for all dealer provision ... 26

Extended warranties: around 40% of Brazilian dealers offer extended warranty schemes .. 28

Road assistance: only a small proportion of dealers operate their own assistance scheme 30

Automotive manufacturer brand survey . 32

Provision of consumer automotive financial services . 32

Manufacturer-based provision of motor insurance is markedly lower than that of dealers .... 32

Competitor dynamics: manufacturer brand partnerships 34

Finance and leasing: captive providers play a key role in Brazil’s auto finance market.... 34

Creditor insurance: Cardif do Brasil and Indiana Seguros are the leading external underwriters ... 36

Motor and GAP insurance: captive and external brokers jointly account for around a quarter of schemes .. 38

Extended warranties: specialist provider The Warranty Group underwrites two brands’ schemes 40

Road assistance: virtually all manufacturer brands organise their own, internal programs ... 42







Tabellenverzeichnis Marktanalyse 'Consumer Automotive Financial Services in Brazil'



LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY .. 1

Key market data for consumer automotive financial services in Brazil, 2011 .... 2

1.0 INTRODUCTION 3

Dealers contacted by Finaccord, segmented by manufacturer group affiliation 4

2.0 MARKET ANALYSIS .. 6

Passenger car parc and new / used passenger car sales in Brazil, 2007 to 2011 . 7

Passenger car parc and new / used passenger car sales in Brazil, 2007 to 2011 (data) 8

New car registrations in Brazil, segmented by manufacturer brand, 2010 ... 9

New / used passenger car finance market in Brazil, segmented by distribution channel: volumes, 2007 to 2011 . 10

New / used passenger car finance market in Brazil, segmented by distribution channel: values, 2007 to 2011 . 11

New / used passenger car finance market in Brazil, segmented by distribution channel: values and volumes, 2007 to 2011 (data) .. 12

% split between the different types of finance and leasing contract sold at the point of sale in Brazil, 2011 13

Total revenues from consumer automotive insurance, warranty and assistance markets in Brazil, 2011 . 15

Total revenues from consumer automotive insurance, warranty and assistance contracts in Brazil, 2011 (data) 16

% split between the different types of creditor insurance policy sold at the point of sale in Brazil, 2011 .... 17

% split between the different types of motor insurance policy sold at the point of sale in Brazil, 2011 .. 18

% of dealers in Brazil offering each type of automotive financial service, 2011 ... 19

Average number of tied and non-tied schemes offered by dealers in Brazil for each type of automotive financial service, 2011 ... 21

Average number of tied and non-tied schemes offered by dealers in Brazil for each type of automotive financial service, 2011 (data) ... 21

% of new and used car purchasers in Brazil acquiring each type of automotive financial service at the point of sale, 2011 .... 23

Provision of finance and leasing by dealers in Brazil, 2011: provision rate, product sources and provider share of non-tied partnerships . 25

Provision of motor and GAP insurance by dealers in Brazil, 2011: provision rate, product sources and provider share of non-tied partnerships . 27

Provision of extended warranties by dealers in Brazil, 2011: provision rate, product sources and provider share of non-tied partnerships . 29

Provision of road assistance by dealers in Brazil, 2011: provision rate, product sources and provider share of non-tied partnerships 31

Comparison of the provision of each type of automotive financial service by manufacturer brands and dealers in Brazil, 2011 ... 33

Provision of finance and leasing by manufacturer brands in Brazil, 2011: provision rate, operating models and weighted provider share of partnerships .. 35

Provision of creditor insurance by manufacturer brands in Brazil, 2011: provision rate, operating models and weighted provider share of partnerships .. 37

Provision of motor and GAP insurance by manufacturer brands in Brazil, 2011: provision rate, operating models and weighted provider share of partnerships .... 39

Provision of extended warranties by manufacturer brands in Brazil, 2011: provision rate, operating models and weighted provider share of partnerships .. 41

Provision of road assistance by manufacturer brands in Brazil, 2011: provision rate, operating models and weighted provider share of partnerships 43

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