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Consumer Automotive Financial Services in Italy

  • November 2015
  • -
  • Finaccord
  • -
  • 64 pages

Consumer Automotive Financial Services in Italy investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Italy. 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, plus stand-alone driver accident and vehicle running costs 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 Italy 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 lending institutions.

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, GAP insurance, driver accident insurance and vehicle running costs 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 1.98 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 85 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 44 car manufacturer brands in Italy. 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 ACI, Agos Ducato, AXA, Carfull Service, CarGarantie, Compass, Covéa Fleet, Direct Line, Europ Assistance, Fiditalia, Findomestic, GE Capital Servizi Finanziari, Genworth Financial, Helvetia, MAPFRE Warranty, Nobis, Santander Consumer Bank, The Warranty Group, UnipolSAI and Zurich. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Italy.

Table Of Contents

Consumer Automotive Financial Services in Italy
00 EXECUTIVE SUMMARY 1
10 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 Italy 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 9
Abbreviations 9
PartnerBASE and market data annexe 9
Finaccord 10
20 MARKET ANALYSIS 11
Introduction 11
Passenger vehicle data 12
Sales of new cars picked up in both 2014 and 2015… 12
… as did those of used cars 12
Fiat Chrysler remains dominant in terms of new car sales 14
Consumer automotive finance and leasing market 15
Market size and growth 15
In terms of the volume of contracts, direct lending for used cars is the largest segment… 15
although point-of-sale finance for new cars is comfortably the largest by value 16
Types of finance and leasing product 18
Almost 70% of private car finance takes the form of simple loans with no option to return the vehicle 18
The popularity of finance leases has increased substantially since the previous survey in 2013 18
Consumer automotive insurance, warranty and assistance markets 19
Market sizes 19
In total, the automotive trade is likely to have sold contracts worth around EUR 2 billion in 2015 19
Survey of automotive dealers and manufacturer brands - overview 22
Introduction 22
Provision of consumer automotive financial services 22
Provision rates for GAP insurance and prepaid service contracts have increased since the last survey 22
Number and nature of dealer schemes 24
Dealers have increased somewhat their willingness to use non-tied finance and leasing providers… 24
and the average number of providers used for motor insurance has also risen 24
Types of creditor insurance policy sold by dealers 26
CONSUMER AUTOMOTIVE FINANCIAL SERVICES IN ITALY
© FINACCORD (11/2015) II
Creditor insurance policies in the automotive sector always comprise comprehensive cover… 26
Types of motor insurance policy sold by dealers 27
… but this is not the case for motor insurance, for which liability cover is often not available 27
Sources of road assistance distributed by dealers 28
Road assistance is almost always bundled with both factory and extended warranties 28
Consumer uptake of automotive financial services through dealers 29
Take-up rates for point-of-sale finance and leasing increased slightly between 2013 and 2015… 29
… and have also risen for most other products, including extended warranties and GAP insurance 29
Survey of automotive dealers and manufacturer brands - partnerships 31
Introduction 31
Finance and leasing 32
Findomestic, GE Capital, Fiditalia and Agos Ducato are the dominant non-tied providers in Italy 32
although competition comes from at least nine smaller non-tied providers of finance and leasing 32
A majority of manufacturer brands offering finance and leasing utilise a captive finance provider 34
among which FCA Bank is the largest competitor by weighted share of partnerships 34
Across all of its operations, FCA Bank achieved a penetration rate of 43% in 2014 34
External finance providers are mainly limited to relationships with small and medium-sized brands 34
Across all types of provider, the leading firm has an implied market share of new business of 234% 36
Creditor insurance 37
There are five main non-captive competitive units operating in this market 37
among which CACI and BNP Paribas Cardif claim the highest weighted share of partnerships 37
Motor insurance 39
Multiple non-tied providers are active in dealer-intermediated motor insurance 39
… among which Helvetia, UnipolSai and Zurich appear to achieve the highest rates of penetration 39
Direct Line's relationship with brands served by FCA Bank makes it the sector leader… 41
… and it is followed by Covea Fleet… 41
… making them the leaders in the combined analysis of dealer and manufacturer brand relationships 43
Extended warranties 44
MAPFRE and CarGarantie are the most prominent non-tied providers of extended warranties 44
Several manufacturer brands utilise external providers for the extended warranty programs… 46
but most apparently manage extended warranty schemes on a purely internal basis 46
The top four competitors are likely to control over two thirds of the volume of extended warranty sales 48
Road assistance 49
Where made available on a non-tied basis, this can be distributed in a variety of different formats 49
Three main competitors compete for manufacturer brand mandates for road assistance 51
GAP insurance 53
In this field, the majority of active dealers concentrate on intermediating tied propositions 53
with three quarters of manufacturer brands researched having a formal arrangement… 55
… and with BNP Paribas Cardif and Genworth Financial most visible as external providers 55
Prepaid service contracts 57
Manufacturer or importer tied propositions are also dominant in this arena 57
Carfull Service has established relationships with several manufacturer brands for prepaid service contracts 58
Vehicle running costs insurance 60
Comparatively few dealers offer this type of cover 60
mainly as a result of CACI having initiated a program with FCA Bank 61
Driver accident insurance 62
Nobis Assicurazioni is the only non-tied provider identifiable from the dealer survey… 62
albeit Cigna Life is utilised by RCI Banque and AXA by Volkswagen Bank for this type of cover 63
CONSUMER AUTOMOTIVE FINANCIAL SERVICES IN ITALY
© FINACCORD (11/2015) III
LIST OF GRAPHICS / TABLES
00 EXECUTIVE SUMMARY 1
Key market data for consumer automotive financial services in Italy, 2015 2
10 INTRODUCTION 3
20 MARKET ANALYSIS 11
Passenger car parc and new / used passenger car sales in Italy, 2011 to 2015 12
Passenger car parc and new / used passenger car sales in Italy, 2011 to 2015 (table) 13
New passenger car registrations in Italy, segmented by manufacturer group, 2015 14
New and used passenger car finance market in Italy, segmented by distribution channel: volumes, 2011 to 2015 15
New and used passenger car finance market in Italy, segmented by distribution channel: values, 2011 to 2015 16
New and used passenger car finance market in Italy, 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 Italy, 2015 18
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Italy, 2015 20
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Italy, 2015 (table) 21
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Italy, 2015 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Italy, 2015 (table) 24
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Italy, 2015 25
% split between the different types of creditor insurance policy sold at the point of sale in Italy, 2015 26
% split between the different types of motor insurance policy sold at the point of sale in Italy, 2015 27
% availability of road assistance through factory warranties, annual services, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Italy, 2015 28
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Italy, 2015 30
Provision of finance and leasing by dealers in Italy, 2015: provision rate, product sources and provider share of non-tied partnerships 33
Provision of finance and leasing by manufacturer brands in Italy, 2015: provision rate, operating models and weighted provider share of partnerships 35
Implied market shares of new business for finance and leasing in Italy, 2015 36
Provision of creditor insurance by manufacturer brands in Italy, 2015: provision rate, operating models and weighted provider share of partnerships 38
Provision of motor insurance by dealers in Italy, 2015: provision rate, product sources and provider share of non-tied partnerships 40
Provision of motor insurance by manufacturer brands in Italy, 2015: provision rate, operating models and weighted provider share of partnerships 42
Implied market shares of new business for manufacturer-branded and dealer-intermediated motor insurance in Italy, 2015 43
Provision of extended warranties by dealers in Italy, 2015: provision rate, product sources and provider share of non-tied partnerships 45
Provision of extended warranties by manufacturer brands in Italy, 2015: provision rate, operating models and weighted provider share of partnerships 47
Implied market shares of new business for extended warranties in Italy, 2015 48
CONSUMER AUTOMOTIVE FINANCIAL SERVICES IN ITALY

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