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Consumer Automotive Financial Services in Turkey

  • December 2015
  • -
  • Finaccord
  • -
  • 52 pages

Consumer Automotive Financial Services in Turkey investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Turkey. 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 Turkey 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 and prepaid service contracts 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 TRY 1.59 billion in total in 2015 (about EUR 486 million), 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 50 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 32 car manufacturer brands in Turkey. 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 or their importers, organisations covered by the report include Akbank, Aksigorta, Anadolu Sigorta, AXA, Dssa Warranty, GarantiBank, I'bank, Koçfinans, MAPFRE, Marm Assistance, TEB Cetelem and Turassist. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Turkey.

Table Of Contents

Consumer Automotive Financial Services in Turkey

TABLE OF CONTENTS
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 Turkey based on primary research 3
Methodology 3
Survey of dealers and manufacturers 3
Market data 4
Computation of market data is based on a complex set of assumptions and variables… 4
…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 7
Tied and non-tied providers 8
Abbreviations 8
Exchange rate 8
PartnerBASE and market data annexe 8
Finaccord 9
20 MARKET ANALYSIS 11
Introduction 11
Passenger vehicle data 12
Sales of both new and used cars have grown significantly in recent years 12
Three manufacturer groups account for over a half of new car sales 13
Consumer automotive finance and leasing market 14
Market size and growth 14
Rising car sales in one form or another saw the volume of cars financed hit a peak in 2015 14
with the market value having risen at a nominal compound annual rate of 116% since 2011 15
Types of finance and leasing product 17
The vast majority of consumer automotive finance in Turkey is skewed to one type of finance product 17
Consumer automotive insurance, warranty and assistance markets 18
Market sizes 18
In total, the automotive trade is likely to have sold contracts worth over TRY 15 billion in 2015 18
Survey of automotive dealers and manufacturer brands - overview 21
Introduction 21
Provision of consumer automotive financial services 21
The dealer provision rate for extended warranties rose quite notably between 2013 and 2015 21
Number and nature of dealer schemes 23
Turkish dealers commonly work with two partners for finance and leasing 23
with the influence of non-tied providers having apparently declined sharply 23
Types of creditor insurance policy sold by dealers 25
It is usual for comprehensive creditor insurance policies to be made available with automotive finance 25
Types of motor insurance policy sold by dealers 26
Almost all motor insurance policies sold through dealers include both liability and other types of cover 26
Sources of road assistance distributed by dealers 27
Road assistance is often bundled with other automotive financial services 27
Consumer uptake of automotive financial services through dealers 28
Take-up rates for point-of-sale finance in Turkey have changed little since 2013 28
although those for extended warranties and motor insurance have increased 28
Survey of automotive dealers and manufacturer brands - partnerships 30
Introduction 30
Finance and leasing 31
There are at least 13 non-tied providers active in the Turkish market 31
among which seven are likely to hold a reasonably high market share 31
Most manufacturer brands have an arrangement for the provision of finance and leasing services 33
in a sector that includes three captive finance providers and one captive finance broker 33
Across all types of provider, this analysis implies that the leading firm has nearly a fifth of new business 35
Creditor insurance 36
Three underwriters of creditor insurance maintain links with captive finance providers 36
Motor insurance 38
Aksigorta, AXA, ERGO and Anadolu are the leading non-tied providers of motor insurance… 38
… with more than a dozen others also active in this field 38
AXA is also used as preferred provider of motor insurance by as many as six brands 40
and Allianz by seven… 40
… helping to make them the leading underwriters in the combined analysis 42
Extended warranties 43
Extended warranty provision is dominated by tied manufacturer or importer schemes 43
Over two thirds of manufacturer brands researched have introduced extended warranty programs 43
Road assistance 45
Where made available on a non-tied basis, road assistance can be sold in three embedded formats 45
Turassist is the dominant provider of road assistance to manufacturer brands… 47
… followed by indigenous competitor Marm Assistance 47
GAP insurance 49
It remains the case that few Turkish dealers offer GAP insurance as a stand-alone product… 49
… which is partly a consequence of the limited involvement of manufacturer brands 49
Prepaid service contracts 51
In contrast, the interest of dealers in selling prepaid service contracts seems to be rising… 51
with the concept having been introduced by 11 manufacturer brands
LIST OF GRAPHICS / TABLES
00 EXECUTIVE SUMMARY 1
Key market data for consumer automotive financial services in Turkey, 2015 2
10 INTRODUCTION 3
20 MARKET ANALYSIS 11
Passenger car parc and new / used passenger car sales in Turkey, 2011 to 2015 12
Passenger car parc and new / used passenger car sales in Turkey, 2011 to 2015 (table) 13
New passenger car registrations in Turkey, segmented by manufacturer group, 2015 13
New and used passenger car finance market in Turkey, segmented by distribution channel: volumes, 2011 to 2015 14
New and used passenger car finance market in Turkey, segmented by distribution channel: values, 2011 to 2015 15
New and used passenger car finance market in Turkey, segmented by distribution channel: values and volumes, 2011 to 2015 (table) 16
% split between the different types of finance and leasing contract organised at the point of sale in Turkey, 2015 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Turkey, 2015 19
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Turkey, 2015 (table) 20
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Turkey, 2015 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Turkey, 2015 (table) 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Turkey, 2015 24
% split between the different types of creditor insurance policy sold at the point of sale in Turkey, 2015 25
% split between the different types of motor insurance policy sold at the point of sale in Turkey, 2015 26
% availability of road assistance through factory warranties, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Turkey, 2015 27
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Turkey, 2015 29
Provision of finance and leasing by dealers in Turkey, 2015: provision rate, product sources and provider share of non-tied partnerships 32
Provision of finance and leasing by manufacturer brands in Turkey, 2015: provision rate, operating models and weighted provider share of partnerships 34
Implied market shares of new business for finance and leasing in Turkey, 2015 35
Provision of creditor insurance by manufacturer brands in Turkey, 2015: provision rate, operating models and weighted provider share of partnerships 37
Provision of motor insurance by dealers in Turkey, 2015: provision rate, product sources and provider share of non-tied partnerships 39
Provision of motor insurance by manufacturer brands in Turkey, 2015: provision rate, operating models and weighted provider share of partnerships 41
Implied market shares of new business for manufacturer-branded and dealer-intermediated motor insurance in Turkey, 2015 42
Provision of extended warranties by dealers in Turkey, 2015: provision rate and product sources 43
Provision of extended warranties by manufacturer brands in Turkey, 2015: provision rate, operating models and weighted provider share of partnerships 44
Provision of road assistance by dealers in Turkey, 2015: provision rate, product sources and provider share of non-tied partnerships 46
Provision of road assistance by manufacturer brands in Turkey, 2015: provision rate, operating models and weighted provider share of partnerships 48
Provision of GAP insurance by dealers in Turkey, 2015: provision rate and product sources 49
Provision of GAP insurance by manufacturer brands in Turkey, 2015: provision rate and operating models 50
Provision of prepaid service contracts by dealers in Turkey, 2015: provision rate and product sources 51
Provision of prepaid service contracts by manufacturer brands in Turkey, 2015: provision rate, operating models and weighted provider share of partnerships 52

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