Report prospectus extended_warranties_new_used_cars_emerging_global_markets

Extended Warranties for New and Used Cars in Emerging Global Markets

Extended Warranties for New and Used
Cars in Emerging Global Markets
Report prospectus
March 2012

Expertise in financial services
© Finaccord Ltd., 2012 Web: www.finaccord.com. E-mail: info@finaccord.com 1


Prospectus contents

Page

What is the research? 3
What methodology has been used? 4
How do dealership surveyed break down? 5
Which manufacturer brands have been investigated? 6
What is the report structure? 7
What are the key features of the research? 8
How can the research be used? 9
How can the PartnerBASE™ be used? 10
Who can use the research? 11
What are some of the key findings? 12-15
What is the cost and format? 16
How can the research be purchased? 17



What is the research?
Finaccord’s report titled Extended Warranties for New and Used Cars in Emerging Global Markets
investigates the market for extended warranties linked to sales of new and used passenger cars to
consumers in ten important global markets. In total, Finaccord has calculated this sector across all
ten countries to have been worth in the region of USD 615 million in 2011 in gross written premiums
and other revenues.

Based on a survey of 765 dealers in Argentina, Brazil, China, India, Indonesia, Mexico, South
Africa, South Korea, Taiwan and Thailand plus an investigation typically covering between 30 and
40 automotive brands in each country, the study delivers unique insights into the market for
extended warranties for passenger cars bought by consumers, with fully comparable and
standardised market values split between new and used cars.

In addition to this market data, the survey measures the propensity of dealers to work with
independent extended warranty providers as well as those tied to manufacturers and importers; it
reports on customer take-up rates for extended warranties at the point of sale; it identifies the
leading non-tied providers used at the point of sale; and it describes the partnerships in place
between manufacturers or importers and extended warranty providers.



What methodology has been used?
Finaccord’s survey of dealerships in emerging global markets was carried out between November
2011 and January 2012. The research embraces the following information:

• whether extended warranties are marketed to purchasers of new and used vehicles;
• if so, how many providers are used?
• if so, what are the identities of the providers used?
• if so, how do these differ between manufacturer-branded providers and independent suppliers?
• if so, what are the average take-up rates for buyers of new and used cars?

The results of this research provide unique data for dealer penetration rates, operating models,
provider share of partnerships, and both average and overall customer take-up rates for extended
warranties in each country.

Moreover, Finaccord’s manufacturer brand survey pinpoints programs for extended warranties
organised by manufacturers or their local importers in each country, identifying the extent to which
these are offered through captive entities or in association with external partners. As such, this
constitutes a unique report with an unrivalled level of detail about countries that are key to the future
of the automotive industry.



How do dealerships
surveyed break down?
Taiwan, Toyota, 8.8%
7.8% Multi-
China, 13.1% Volkswagen,
marque,
South Africa, 5.8%
25.6%
7.8%
Hyundai,
Indonesia, 5.6%
India, 12.0%
8.5% Chevrolet,
5.1%
Maruti
Thailand, Suzuki, 5.0%
9.2% Brazil, 10.8%
Honda, 4.8%

Other Ford, 4.7%
Argentina,
9.8% Mexico, groups, Nissan, 3.9%
South Korea, 10.5% 25.0%
Mitsubishi, Fiat, 3.1%
10.5%
2.6%
Finaccord’s universe of dealerships includes 765 respondents in total spread across ten important
emerging markets including manufacturer-owned dealerships, franchised dealerships, multi-marque
dealerships and new and used car supermarkets. For a full list of the organisations contacted for the
research and included in PartnerBASE™, please contact Finaccord.



Which manufacturer brands
have been investigated?
Manufacturer brands investigated through the local offices of the manufacturers themselves or those
of their importers in at least one of the countries covered in this report are as follows:
Acura Chery Geely Jinbei MG Škoda
Alfa Romeo Chevrolet Gleagle Karry Auto MINI Smart
Alpheon Chrysler Great Wall Kia Mitsubishi Soueast Motor
Aston Martin Citroën Hafei Automobile Lamborghini Nissan Spyker
Audi Daihatsu Haima Land Rover Opel SsangYong
Baojun Dodge Hawtai Landwind Peugeot Subaru
Bentley Effa Hindustan Motors Lexus Porsche Suzuki
Besturn Emgrand Honda Liebao Proton Tata Motors
BMW Englon Hongqi Lifan Motors Ram Tobe
Buick FAW Hyundai Lincoln Rely Toyota
BYD Fengshen Infiniti Luxgen Renault Troller
Cadillac Ferrari Isuzu Mahindra & Mahindra Renault Samsung Volkswagen
Chana Fiat JAC Maruti Suzuki Riich Volvo
Changan Force Motors Jaguar Maserati Roewe WuLing
Changfeng Ford Jeep Mazda Saab Zhonghua
Changhe FXauto Jiangling Mercedes-Benz Seat Zotye Auto



What is the report structure?
0. Executive Summary: providing a concise evaluation of the principal findings of the report.

1. Introduction: offering a rationale, a detailed description of methodology and definitions.

2. Overview: including an overview of the market for providing extended warranties in conjunction
with the purchase of new and used passenger vehicles across the ten countries. Analyses include:
trends in sales of new and used passenger vehicles; comparison of key metrics describing the
behaviour of dealers in this market; comparison of average customer take-up rates for point-of-sale
extended warranties; and calculation of the market size, in terms of gross written premiums and
other revenues in each country, for extended warranties for new and used cars.

3. Argentina: an in-depth analysis of the market for extended warranties for new and used cars in
Argentina including: an overview of the market for new and used passenger cars; dealer survey
results including analysis of the use of extended warranty programs branded or endorsed by
manufacturers as opposed to policies provided by independent warranty providers; and
manufacturer / importer survey results, including identification of partners used for branded or
endorsed extended warranty schemes.

4 - 12: Brazil, China, India, Indonesia, Mexico, South Africa, South Korea, Taiwan and Thailand (for all, contents as for Argentina).



What are the key features of the research?
Key features of this report include:

• comparable and standardised data concerning extended warranties for new and used cars
covering a total of ten major emerging economies, ranging from relatively well-established
automotive markets such as Mexico, South Korea and Taiwan to fast-developing ones such as
China and India;

• provision of hitherto unpublished market size and segmentation data for all of these markets
generated from Finaccord’s proprietary European Automotive Financial Services Model;

• unique analysis of the provision and uptake of extended warranties at the point of sale, including
the average number of providers used by dealers, the degree to which dealers collaborate with non-
tied companies in addition to tied partners, and average customer take-up rates;

• in both the report and the accompanying PartnerBASE™ database, identification of non-tied
providers of extended warranties used by dealerships;

• in both the report and the accompanying PartnerBASE™ database, identification of partnerships
between manufacturers or importers and extended warranties


How can the research be used?
You may be able to use this report and the PartnerBASE™ that accompanies it in one or more of
the following ways:

• understand the current size and future potential of the market for extended warranties in ten of the
most important growth economies in the world;

• appreciate how this opportunity breaks down between extended warranties for new and used
cars;

• benchmark the degree of competitive intensity recorded for distributing extended warranties
through the point of sale, and see where dealers are most open to working with non-tied partners;

• identify the foremost competitors in each country: have international companies such as Allianz,
Assurant, AXA, MAPFRE and The Warranty Group established themselves in each market, or do
national providers predominate?

• evaluate the potential for establishing partnerships with manufacturers and importers for branded
or endorsed extended warranty schemes across these ten key markets.



How can the PartnerBASE™ be used?

Choose operating model
Select country

EXTENDED WARRANTIES
Product Total number
Operating model Partner(s)
Brand Country offered? of schemes

Mazda South Africa Yes External underwriter 1 Innovation Group
Peugeot Brazil Yes External underwriter 1 Indiana Seguros (Liberty Mutual)
Peugeot Mexico Yes External underwriter 1 Quálitas
Škoda India Yes External underwriter 1 Bajaj Allianz General Insurance
Toyota South Africa Yes External underwriter 1 Innovation Group

Look up Identify product
specific brands partners

Note: for this report, PartnerBASE also covers 765 dealerships.



Who can use the research?

1. Automotive manufacturers: this research provides a unique data allowing you to assess
objectively your position in extended warranties and to gauge the threat from non-captive
competitors;

2. Underwriters and administrators of extended warranties: what are the opportunities to increase
or build market share within the extended warranty markets of each country by means of
distribution alliances with manufacturers, importers or dealers?

3. Finance and leasing companies: extended warranties can be embedded in consumer finance
and leasing packages, hence it is important for providers in these areas to comprehend fully
the apparent opportunities;

4. Management consultancies: are you helping a manufacturer or warranty provider with its
strategy or evaluating how it can develop its business in extended warranties? Understand the
current status of this product in ten emerging global markets, saving time and effort on
researching the subject yourself.



What are some of the key findings?
1. Few manufacturer brands have schemes for extended warranties in China,
Indonesia or South Korea, while most do in India, Mexico and South Africa

Proportion of manufacturer brands with schemes for extended warranties, 2011

100%

80%

60%

40%

20%

0%
ARG BRA CHN IND IDN MEX ZAF KOR TWN THA Ave.
Source: Finaccord Global Automotive Financial Services Survey



What are some of the key findings? (cont.)
2. Most dealers in South Africa offer extended warranties that they have arranged
themselves, with Motorite and SA Warranties holding the largest share of partnerships

% of dealers offering extended warranties and product source Provider share of partnerships, %
100%
legendtrick Motorite,
other, 27.8% 26.7%
80%
Undisclosed

60% Both

40% Dealer (non-tied)

Manufacturer / importer Innovation
20% Group, 8.5%

McCarthy SA
0% Warranties,
Product offered Product source Insurance
Services / 25.6%
(see legend)
McSure,
Source: Finaccord Global Automotive Financial Services Survey
11.4%



3. In Brazil, although customer take-up rates for extended warranties are higher with new car
sales than with used cars, the scale of the used car market offers massive potential

Passenger car parc (million) New / used passenger car sales (million)
50 10
Used car sales

40 8

30 6
New car sales
Car parc
20 4

10 2

0 0
2007 2008 2009 2010 2011

Source: Finaccord Global Automotive Financial Services Model



4. Key findings from the executive summary include:

• across the ten countries in question, the market for extended warranties for passenger cars was
worth in the region of USD 615 million in 2011 in terms of gross written premiums and similar
revenues;

• the value of extended warranties sold with new cars was greater than that for used cars in seven
countries out of ten, though the used car segment is likely to rise as dealers become more involved
in selling used cars and as consumers become more aware of the cost of repairing cars;

• the use of extended warranties varies widely between countries: while 40.6% of dealers offered
them measured as an unweighted average across all ten countries, this figure ranged from a low of
3.1% to a high of 97.5%;

• in many countries, dealers rely on manufacturers’ and importers’ tied schemes, and many of these
are run internally; nevertheless, there are opportunities for external providers to form new
partnerships, both with dealers and with manufacturer brands.



What is the cost and format?
Extended Warranties for New and Used Cars in Emerging Global Markets is available as a standard
Adobe Acrobat PDF document and / or hard copy. The PartnerBASE™ that accompanies it at no further
charge is in Microsoft Excel format. Costs for this research set and other titles about automotive financial
services are as follows:

REPORT PRICE *
Extended Warranties for New and Used Cars in Emerging Global Markets GBP 1,995
Automotive Finance and Leasing for Consumers in Emerging Global Markets GBP 1,995
Automotive Finance and Leasing for Consumers in Europe GBP 2,495
Consumer Automotive Financial Services in Eastern and South-Eastern Europe GBP 2,495
Consumer Automotive Financial Services in Emerging Global Markets GBP 3,995
Consumer Automotive Financial Services in Northern and Central Europe GBP 2,995
Consumer Automotive Financial Services in Southern and Western Europe GBP 2,995
Extended Warranties for New and Used Cars in Europe GBP 2,495
Manufacturer-Branded and Dealer-Intermediated Motor Insurance and Road Assistance in Emerging Global Markets GBP 1,995
Manufacturer-Branded and Dealer-Intermediated Motor Insurance and Road Assistance in Europe GBP 2,495

For UK-based clients, VAT at the prevailing rate will be added to the basic price.
Costs quoted are for a single site user licence only.
For a corporate user licence, please see the next slide for further details.
Invoices can be paid in EUR, at the prevailing exchange rate, if preferred.


How can the research be purchased?
Simple. Just go to the relevant area of the Finaccord web site available at
www.finaccord.com/order_eu_afsr.htm and fill in the online order form, clearly indicating:
• report required
• type of corporate user licence, if required *
• billing name
• address and e-mail address
• purchase order number, if applicable

Please allow up to one working day for the delivery of electronic copy by e-mail.

* For the corporate user licence please choose one of the following options:
1. One office, one country: no supplement over and above basic cost of reports ordered
2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered
3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered
4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered

VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers.


Report prospectus extended_warranties_new_used_cars_emerging_global_markets

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Report prospectus extended_warranties_new_used_cars_emerging_global_markets