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Consumer Automotive Financial Services in Germany

  • March 2016
  • -
  • Finaccord
  • -
  • 60 pages

Consumer Automotive Financial Services in Germany investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Germany. In addition to analysing the market for finance and leasing services, the study also covers creditor insurance, motor insurance, road assistance, extended warranties, prepaid service contracts 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 Germany is provided in terms of gross advances and assets leased for 2011 to 2015 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 finance providers.

Moreover, also by means of data for average take-up rates, the markets for creditor insurance, motor insurance, road assistance, extended warranties, prepaid service contracts 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 2015. These markets, estimated to be worth EUR 4.03 billion in total in 2015, are broken down between new and used cars, and between new contracts sold during 2015 and in-force business sold in previous years but still being renewed in 2015.

The report draws on a survey of 100 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 42 car manufacturer brands in Germany. The PartnerBASE™ dataset that accompanies the report details each of the marketing initiatives for consumer automotive financial services traced by Finaccord for both dealers and manufacturers; a market data annexe is also available in a convenient spreadsheet format so that there is no need to re-enter key data points from the report.

In addition to captive finance companies owned by manufacturer brands, organisations covered by the report include ADAC, akf-Gruppe, Allianz, AXA, Bank11, BDK, Cardif, CarGarantie, Direct Line, ERGO, Europ Assistance, HDI, MENEKS, MultiPart Garantie, Nürnberger, Real Garant, RheinLand Versicherung, ROLAND Schutzbrief, Santander Consumer Bank and Société Générale Insurance. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Germany.

Table Of Contents

Consumer Automotive Financial Services in Germany
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
This report offers a detailed updated analysis of the subject in Germany based on primary research 3
Methodology . 3
Survey of dealers and manufacturers 3
Market data . 5
Computation of market data is based on a complex set of assumptions and variables… . 5
…in order to provide market segmentations in unrivalled detail 5
External sources . 6
Definitions . 6
Finance and leasing products 6
Insurance, warranty and assistance products . 7
Operating models . 8
Tied and non-tied providers 8
Abbreviations 8
PartnerBASE and market data annexe 8
Finaccord 9
2.0 MARKET ANALYSIS . 11
Introduction . 11
Passenger vehicle data . 12
New car sales to individual customers in Germany were around 150,000 lower in 2015 than in 2011 . 12
Three indigenous manufacturers accounted for almost 60% of new cars registered in 2015 13
Consumer automotive finance and leasing market 14
Market size and growth 14
Point-of-sale finance for used cars expanded most rapidly between 2011 and 2015… 14
… in terms of both volume and value of new contracts . 16
Types of finance and leasing product 18
Loans with an option to return the car outnumber those without this option. 18
. with financial leasing making up close to a quarter of private car finance . 18
Consumer automotive insurance, warranty and assistance markets . 19
Market sizes 19
In total, the automotive trade is likely to have sold contracts worth over EUR 4 billion in 2015 . 19
Survey of automotive dealers and manufacturer brands - overview 22
Introduction 22
Provision of consumer automotive financial services . 22
Product provision rates via car dealers have changed little in recent years… 22
… but have apparently slipped slightly for GAP insurance and prepaid service contracts . 22
Number and nature of dealer schemes . 24
The average number of providers of finance and leasing used by dealers has increased somewhat 24
Types of creditor insurance policy sold by dealers . 26
In the great majority of cases, dealers report availability of comprehensive creditor insurance policies 26
Types of motor insurance policy sold by dealers 27
Three types of motor insurance policies are available through dealers 27
Sources of road assistance distributed by dealers . 28
Road assistance is sometimes bundled with extended warranties, motor insurance and service contracts . 28
Consumer uptake of automotive financial services through dealers . 29
Take-up rates for point-of-sale finance have risen slightly among both new and used cars buyers. . 29
.and they have also increased for prepaid service contracts and GAP insurance 29
Survey of automotive dealers and manufacturer brands - partnerships . 31
Introduction 31
Finance and leasing 32
Santander Consumer Bank leads from BDK as the dominant non-tied provider in Germany… . 32
… albeit the latter appears to have gained ground in this field in recent years . 32
Bank 11 is ranked third in this field, ahead of a large number of smaller finance providers . 32
All manufacturer brands collaborate with a captive or preferred finance provider 34
By weighted share of partnerships, six captive firms are ranked from first to sixth. 34
.while Santander Consumer Bank is the leading non-captive provider . 34
Banque PSA Finance became operative as a joint venture provider in Germany in 2015 34
Santander Consumer Bank ranks second in the combined analysis behind Volkswagen Financial Services 37
Creditor insurance . 38
Where relationships are classified as direct, most schemes are organised with a single, external underwriter 38
Cardif holds the highest weighted share of partnerships by a large margin. . 38
. although a significant number of other insurers also compete for mandates in this arena . 38
Motor insurance 40
A majority of dealers distribute manufacturer-branded motor insurance. 40
.with Nürnberger identifiable as the most frequently-used non-tied provider 40
Allianz is the leading external underwriter to work directly with manufacturer brands. . 42
… and has been operating a joint venture insurer with VW group since 2013… . 42
.while HDI, ERGO and Direct Line, among others, also lay claim to important deals. 42
The leading provider holds an implied share of over 30% of the market in the combined analysis . 44
Extended warranties . 45
Real Garant, CarGarantie and MultiPart Garantie share a half of non-tied partnerships between them. 45
.with five other competitors named by dealers . 45
Three external providers of extended warranties are reported as partners of manufacturer brands . 47
Close to three quarters of new business in the German market could be due to just two competitors . 49
Road assistance . 50
A significant proportion of dealerships source road assistance from non-tied sources of one sort or another 50
ADAC is the leading external road assistance provider used by manufacturer brands 52
GAP insurance 54
Non-tied GAP insurance products usually come via non-tied finance and leasing providers… . 54
… making RheinLand Versicherung and Societe Generale Insurance significant providers in this context . 54
The vast majority of significant brands have an official program in place for GAP insurance 56
. with at least eight providers competing for manufacturer relationships in this sphere 56
Allianz retains its position as the dominant provider of GAP insurance in the combined analysis . 58
Prepaid service contracts . 59
A majority of dealers use manufacturer or importer tied propositions in this area. . 59
.and nearly a half of manufacturer brands run a program for prepaid service contracts 59

LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY . 1
Key market data for consumer automotive financial services in Germany, 2015 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS . 11
Passenger car parc and new / used passenger car sales in Germany, 2011 to 2015 12
Passenger car parc and new / used passenger car sales in Germany, 2011 to 2015 (table) . 13
New passenger car registrations in Germany, segmented by manufacturer group, 2015 14
New and used passenger car finance market in Germany, segmented by distribution channel: volumes, 2011 to 2015 . 15
New and used passenger car finance market in Germany, segmented by distribution channel: values, 2011 to 2015 . 16
New and used passenger car finance market in Germany, segmented by distribution channel: values and volumes, 2011 to 2015 (table) . 17
% split between the different types of finance and leasing contract organised at the point of sale in Germany, 2016. 18
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Germany, 2015 . 20
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Germany, 2015 (table) . 21
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Germany, 2016 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Germany, 2016 (table) 24
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Germany, 2016 25
% split between the different types of creditor insurance policy sold at the point of sale in Germany, 2016 . 26
% split between the different types of motor insurance policy sold at the point of sale in Germany, 2016 . 27
% availability of road assistance through factory warranties, annual service, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Germany, 2016 28
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Germany, 2016 . 30
Provision of finance and leasing by dealers in Germany, 2015: provision rate, product sources and provider share of non-tied partnerships 33
Provision of finance and leasing by manufacturer brands in Germany, 2015: provision rate, operating models and weighted provider share of partnerships 36
Implied market shares of new business for finance and leasing at the point of sale in Germany, 2015 . 37
Provision of creditor insurance by manufacturer brands in Germany, 2015: provision rate, operating models and weighted provider share of partnerships 39
Provision of motor insurance by dealers in Germany, 2015: provision rate, product sources and provider share of non-tied partnerships . 41
Provision of motor insurance by manufacturer brands in Germany, 2015: provision rate, operating models and weighted provider share of partnerships . 43
Provision of extended warranties by dealers in Germany, 2015: provision rate, product sources and provider share of non-tied partnerships 46
Provision of extended warranties by manufacturer brands in Germany, 2015: provision rate, operating models and weighted provider share of partnerships 48
Implied market shares of new business for extended warranties at the point of sale in Germany, 2015 . 49
Provision of road assistance by dealers in Germany, 2015: provision rate, product sources and provider share of non-tied partnerships . 51
Provision of road assistance by manufacturer brands in Germany, 2015: provision rate, operating models and weighted provider share of partnerships . 53
Provision of GAP insurance by dealers in Germany, 2015: provision rate, product sources and provider share of non-tied partnerships . 55
Provision of GAP insurance by manufacturer brands in Germany, 2015: provision rate, operating models and weighted provider share of partnerships . 57
Implied market shares of new business for GAP insurance at the point of sale in Germany, 2015 . 58
Provision of prepaid service contracts by dealers in Germany, 2015: provision rate, product sources and provider share of non-tied partnerships 60
Provision of prepaid service contracts by manufacturer brands in Germany, 2015: provision rate, operating models and weighted provider share of partnerships 60

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