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Consumer Automotive Financial Services in Belgium

  • February 2016
  • -
  • Finaccord
  • -
  • 52 pages

Consumer Automotive Financial Services in Belgium investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Belgium. 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 Belgium is provided in terms of gross advances and assets leased for 2008 to 2012 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 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 2012. These markets, estimated to be worth EUR 259.4 million in total in 2012, are broken down between new and used cars, and between new contracts sold during 2012 and in-force business sold in previous years but still being renewed in 2012.

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 37 car manufacturer brands in Belgium. 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 Actel, Allianz Global Assistance, AlphaCredit, Buy Way Personal Finance, Corona, IMA Benelux, Record Bank, Touring, VAB and Van Breda Car Finance. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Belgium.

Table Of Contents

Consumer Automotive Financial Services in Belgium
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 Belgium 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 6
Operating models 7
Tied and non-tied providers 8
Abbreviations 8
PartnerBASE and market data annexe 8
Finaccord 9
20 MARKET ANALYSIS 10
Introduction 10
Passenger vehicle data 11
New and used car sales have stagnated in line with Belgium's sluggish economy 11
Three manufacturer groups account for over a half of new car sales 12
Consumer automotive finance and leasing market 13
Market size and growth 13
Point-of-sale finance take-up rates have increased among buyers of both new and used cars 13
The fastest growth by value has been for used car finance arranged at the point of sale 14
Types of finance and leasing product 16
Over 60% of private car finance takes the form of simple loans with no option to return the car… 16
… albeit the use of financial leasing appears to have grown substantially in recent years 16
Consumer automotive insurance, warranty and assistance markets 17
Market sizes 17
In total, the automotive trade is likely to have sold policies worth over EUR 300 million in 2015 17
Survey of automotive dealers and manufacturer brands - overview 20
Introduction 20
Provision of consumer automotive financial services 20
The provision rate for motor and GAP insurance via dealers has risen since the last survey 20
Number and nature of dealer schemes 22
Belgian dealers work with non-tied providers for four of the six product types investigated 22
Types of creditor insurance policy sold by dealers 24
It is most usual for comprehensive creditor insurance policies to be made available with automotive finance 24
Types of motor insurance policy sold by dealers 25
Most dealers are flexible about the type of motor insurance that they can provide to customers 25
Sources of road assistance distributed by dealers 26
Road assistance is often bundled with other automotive financial services 26
Consumer uptake of automotive financial services through dealers 27
Take-up rates for point-of-sale finance in Belgium have increased substantially since 2013 27
… and have also risen for most of the other automotive financial services investigated 27
Survey of automotive dealers and manufacturer brands - partnerships 29
Introduction 29
Finance and leasing 30
AlphaCredit, Record Bank, CPH Bank and Bank Van Breda are the dominant non-tied providers… 30
albeit there are many smaller competitors 30
AlphaCredit is by far the dominant non-captive partner for manufacturer brands 32
… followed at a distance by sister company Arval and Record Bank 32
Across all types of provider, the leading firm has an implied share of new business of more than one third 34
Creditor insurance 35
Only three competitors have direct ties with manufacturer brands 35
namely BNP Paribas Cardif, PSA and Genworth LPI 35
Motor insurance 37
Virtually all dealers utilise tied providers only for motor insurance 37
Actel and subsidiaries of AXA are especially strong in the market for manufacturer-branded cover… 38
… with only three other providers active in this field 38
Extended warranties 40
Europ Assistance is used by dealers most often as a non-tied provider 40
Most manufacturer brands offering extended warranties operate these schemes themselves 42
while CarGarantie claims the largest share of non-captive partnerships 42
A combined analysis assigns an implied market share of more than 20% to the leading competitor 44
Road assistance 45
Where made available on a non-tied basis, this can be distributed in a variety of different formats 45
Four main competitors compete for manufacturer brand mandates for road assistance 47
among which Touring claims the highest weighted share of partnerships 47
GAP insurance 49
Dealers only offer the GAP insurance organised by their manufacturer brands or importers… 49
… and this product is available from only a minority of brands 49
Prepaid service contracts 51
Manufacturer and importer tied propositions are also dominant in this arena 51
… albeit there are many more initiatives than for GAP insurance 51
LIST OF GRAPHICS / TABLES
00 EXECUTIVE SUMMARY 1
Key market data for consumer automotive financial services in Belgium, 2015 2
10 INTRODUCTION 3
20 MARKET ANALYSIS 10
Passenger car parc and new / used passenger car sales in Belgium, 2011 to 2015 11
Passenger car parc and new / used passenger car sales in Belgium, 2011 to 2015 (table) 12
New passenger car registrations in Belgium, segmented by manufacturer group, 2015 12
New and used passenger car finance market in Belgium, segmented by distribution channel: volumes, 2011 to 2015 13
New and used passenger car finance market in Belgium, segmented by distribution channel: values, 2011 to 2015 14
New and used passenger car finance market in Belgium, segmented by distribution channel: values and volumes, 2011 to 2015 (table) 15
% split between the different types of finance and leasing contract organised at the point of sale in Belgium, 2015 16
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Belgium, 2015 18
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Belgium, 2015 (table) 19
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Belgium, 2015 21
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Belgium, 2015 (table) 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Belgium, 2015 23
% split between the different types of creditor insurance policy sold at the point of sale in Belgium, 2015 24
% split between the different types of motor insurance policy sold at the point of sale in Belgium, 2015 25
% availability of road assistance through factory warranties, annual service, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Belgium, 2015 26
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Belgium, 2015 28
Provision of finance and leasing by dealers in Belgium, 2015: provision rate, product sources and provider share of non-tied partnerships 31
Provision of finance and leasing by manufacturer brands in Belgium, 2015: provision rate, operating models and weighted provider share of partnerships 33
Implied market shares of new business for finance and leasing in Belgium, 2015 34
Provision of creditor insurance by manufacturer brands in Belgium, 2015: provision rate, operating models and weighted provider share of partnerships 36
Provision of motor insurance by dealers in Belgium, 2015: provision rate and product sources 37
Provision of motor insurance by manufacturer brands in Belgium, 2015: provision rate, operating models and weighted provider share of partnerships 39
Provision of extended warranties by dealers in Belgium, 2015: provision rate, product sources and provider share of non-tied partnerships 41
Provision of extended warranties by manufacturer brands in Belgium, 2015: provision rate, operating models and weighted provider share of partnerships 43
Implied market shares of new business for extended warranties in Belgium, 2015 44
Provision of road assistance by dealers in Belgium, 2015: provision rate, product sources and provider share of non-tied partnerships 46

Provision of road assistance by manufacturer brands in Belgium, 2015: provision rate, operating models and weighted provider share of partnerships 48
Provision of GAP insurance by dealers in Belgium, 2015: provision rate and product sources 49
Provision of GAP insurance by manufacturer brands in Belgium, 2015: provision rate, operating models and weighted provider share of partnerships 50
Provision of prepaid service contracts by dealers in Belgium, 2015: provision rate and product sources 51
Provision of prepaid service contracts by manufacturer brands in Belgium, 2015: provision rate, operating models and weighted provider share of partnerships 52

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