Marktanalyse - Consumer Automotive Financial Services in India

Marktanalyse - 'Consumer Automotive Financial Services in India'

Consumer Automotive Financial Services in India investigates the market for automotive financial services linked to sales of new and used passenger cars in India. 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 India 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 90 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of the highest-selling automotive brands in India. 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 India.

Inhaltsverzeichnis Marktanalyse 'Consumer Automotive Financial Services in India'



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

Sales of new passenger cars are rising at around 16% per year... .. 7

...with this rapid growth being more than matched by the increase in used car sales ... 7

In India’s concentrated market, Maruti Suzuki accounts for almost half of new car registrations 9

Consumer automotive finance and leasing market ... 10

Market size and growth .. 10

The number of finance contracts (and indeed cash purchases) is growing quickly… . 10

…with new car loans issued at the point of sale representing the majority of finance distribution .. 10

The value of new finance and leasing contracts is rising more quickly than their volume... .. 11

…and direct lending for new car purchases stands at nearly USD 6 billion .. 11

Types of finance and leasing product . 13

Simple loans, typically secured on the vehicle itself, are the mainstay of Indian auto finance ... 13

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

Market sizes 14

Regular motor policies account for more than three quarters of estimated revenues… .. 14

…although extended warranties also make a significant contribution in this market ... 14

GAP cover is widely available, and currently accounts for around USD 100 million in GWP .... 14

In India, creditor insurance is typically cross-sold with the underlying finance or leasing contract… ... 15

…and road assistance policies almost always form part of a standard warranty ... 15

Types of creditor insurance policy . 17

The majority of creditor policies sold by car dealers cover a broad range of risks .. 17

Types of motor insurance policy .... 18

Virtually all motor policies sold by car dealers are of the comprehensive variety.... 18

Automotive dealer survey .. 19

Provision of consumer automotive financial services . 19

Seemingly all dealers can provide motor insurance, whereas only around 45% offer GAP cover . 19

Number and nature of schemes .... 20

Consumer uptake of automotive financial services .... 22

In India, road assistance is often included within standard vehicle warranties… .... 22

…and the uptake of motor insurance at the point of sale is very high by international standards ... 22

Around 70% of new car purchasers also acquire an extended warranty via the dealer… .... 22

…and nearly half of used car buyers take out an auto loan at the point of sale. 22

Competitor dynamics: dealer partnerships ... 24

Finance and leasing: leading providers include Axis Bank and Mahindra & Mahindra Financial Services ... 24

Creditor insurance: partnerships for this type of cover are determined by the lenders themselves 26

Motor insurance: this market is dominated by the joint-venture commercial insurers . 26

GAP insurance: the top three providers jointly account for around 50% of partnerships . 28

Extended warranties: virtually all extended warranty schemes are linked to manufacturers 30

Road assistance: specialist provider MyTVS partners with two Mahindra First Choice outlets . 32

Automotive manufacturer brand survey . 34

Provision of consumer automotive financial services . 34

For most products, the level of manufacturer provision is similar to that of dealers 34

Competitor dynamics: manufacturer brand partnerships 36

Finance and leasing: HDFC Bank and ICICI Bank each partner with five manufacturer brands .... 36

Creditor insurance: Mahindra & Mahindra makes use of its captive broker for this type of cover ... 38

Motor insurance: two thirds of Indian manufacturers that offer this cover work with multiple underwriters .... 40

GAP insurance: Bajaj Allianz is the leading underwriter in this field .... 42

Extended warranties: Tata Motors’ scheme involves a specialist warranty administrator 44

Road assistance: Allianz Global Assistance and MyTVS are the active partners in the area .... 46







Tabellenverzeichnis Marktanalyse 'Consumer Automotive Financial Services in India'



LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY .. 1

Key market data for consumer automotive financial services in India, 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 India, 2007 to 2011 .. 7

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

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

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

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

New / used passenger car finance market in India, 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 India, 2011 ... 13

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

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

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

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

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

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

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

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

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

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

Provision of GAP insurance by dealers in India, 2011: provision rate, product sources and provider share of non-tied partnerships 29

Provision of extended warranties by dealers in India, 2011: provision rate, product sources and provider share of non-tied partnerships . 31

Provision of road assistance by dealers in India, 2011: provision rate, product sources and provider share of non-tied partnerships 33

Comparison of the provision of each type of automotive financial service by manufacturer brands and dealers in India, 2011 .... 35

Provision of finance and leasing by manufacturer brands in India, 2011: provision rate, operating models and weighted provider share of partnerships .. 37

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

Provision of motor insurance by manufacturer brands in India, 2011: provision rate, operating models and weighted provider share of partnerships 41

Provision of GAP insurance by manufacturer brands in India, 2011: provision rate, operating models and weighted provider share of partnerships 43

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