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Consumer Automotive Financial Services in Portugal

  • June 2016
  • -
  • Finaccord
  • -
  • 49 pages

Consumer Automotive Financial Services in Portugal investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Portugal. 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 Portugal 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 EUR 107.1 million 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 40 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 32 car manufacturer brands in Portugal. 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 ACP, Ageas, Allianz Global Assistance, AXA, Banco Credibom, Europ Assistance, MetLife, Mondial Assistance, Santander Consumer and Tranquilidade. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Portugal.

Table Of Contents

Consumer Automotive Financial Services in Portugal
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 Portugal 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
PartnerBASE and market data annexe 8
Finaccord 9
2.0 MARKET ANALYSIS . 10
Introduction . 10
Passenger vehicle data . 11
Both new and used car sales have recovered well from the trough of 2012 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 for used cars expanded most rapidly between 2011 and 2015… 13
… with its value having increased by well over 25% over this period of time . 14
Types of finance and leasing product 16
Financial and operational leasing combined account for over a third of private car finance contracts 16
Consumer automotive insurance, warranty and assistance markets . 17
Market sizes 17
In total, the automotive trade is likely to have sold contracts worth around EUR 107 million in 2015 17
Survey of automotive dealers and manufacturer brands - overview 20
Introduction 20
Provision of consumer automotive financial services . 20
There is scope to increase provision rates through dealers for several automotive financial services… 20
… most notably for GAP insurance 20
Number and nature of dealer schemes . 22
The average number of providers used by dealers for finance and leasing has risen in recent years 22
Types of creditor insurance policy sold by dealers . 24
All dealers selling creditor insurance offer comprehensive policies . 24
Types of motor insurance policy sold by dealers 25
Likewise, comprehensive policies are on offer from all Portuguese dealerships selling motor insurance . 25
Sources of road assistance distributed by dealers . 26
Road assistance is most commonly packaged with factory warranties, annual services and motor insurance 26
Consumer uptake of automotive financial services through dealers . 27
Since 2013, take-up rates for point-of-sale finance in Portugal have not changed greatly in recent times… 27
… although significant variations are apparent for other automotive financial services 27
Survey of automotive dealers and manufacturer brands - partnerships . 29
Introduction 29
Finance and leasing 30
Santander Consumer is the leading player among non-tied finance and leasing providers… 30
…and it also holds partnerships with four significant manufacturer brands in Portugal. . 32
. which makes it one of the leading providers across both captives and non-captives . 34
Creditor insurance . 35
Five providers compete for manufacturer brand partnerships in this arena 35
Motor insurance 37
The most frequently-mentioned non-tied providers of motor insurance are Tranquilidade and Açoreana 37
Four competitors are apparent in the market for manufacturer-branded motor insurance in Portugal… 37
… led by Ageas, which acquired the Portuguese business of AXA in April 2016 . 37
The leading two providers hold an implied share of over 50% of new business in the combined analysis . 40
Extended warranties . 41
Extended warranty distribution through dealers is apparently dominated by tied propositions 41
.with only one external extended warranty provider used by manufacturer brands… 41
… namely LeasePlan 41
Road assistance . 43
A small proportion of dealers sell road assistance as a stand-alone product . 43
20 manufacturer brand partnerships make Europ Assistance the leading provider in Portugal 44
GAP insurance 46
A few Portuguese dealers have begun selling GAP insurance… . 46
. but awareness of it seems to be low given the number of manufacturer brands with schemes for it 46
Prepaid service contracts . 48
A few dealers distribute prepaid service contracts from independent providers . 48
A majority of manufacturer brands have introduced prepaid service contracts 48

LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY . 1
Key market data for consumer automotive financial services in Portugal, 2015 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS . 10
Passenger car parc and new / used passenger car sales in Portugal, 2011 to 2015 11
Passenger car parc and new / used passenger car sales in Portugal, 2011 to 2015 (table) 12
New passenger car registrations in Portugal, segmented by manufacturer group, 2015 12
New and used passenger car finance market in Portugal, segmented by distribution channel: volumes, 2011 to 2015 . 13
New and used passenger car finance market in Portugal, segmented by distribution channel: values, 2011 to 2015 . 14
New and used passenger car finance market in Portugal, 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 Portugal, 2016 16
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Portugal, 2015 18
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Portugal, 2015 (table) . 19
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Portugal, 2016 21
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Portugal, 2016 (table) 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Portugal, 2016 . 23
% split between the different types of creditor insurance policy sold at the point of sale in Portugal, 2016 24
% split between the different types of motor insurance policy sold at the point of sale in Portugal, 2016 25
% availability of road assistance through factory warranties, annual service, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Portugal, 2016 26
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Portugal, 2016 28
Provision of finance and leasing by dealers in Portugal, 2015: provision rate, product sources and provider share of non-tied partnerships . 31
Provision of finance and leasing by manufacturer brands in Portugal, 2015: provision rate, operating models and weighted provider share of partnerships 33
Implied market shares of new business for finance and leasing at the point of sale in Portugal, 2015 34
Provision of creditor insurance by manufacturer brands in Portugal, 2015: provision rate, operating models and weighted provider share of partnerships . 36
Provision of motor insurance by dealers in Portugal, 2015: provision rate, product sources and provider share of non-tied partnerships . 38
Provision of motor insurance by manufacturer brands in Portugal, 2015: provision rate, operating models and weighted provider share of partnerships . 39
Provision of extended warranties by dealers in Portugal, 2015: provision rate and product sources . 41
Provision of extended warranties by manufacturer brands in Portugal, 2015: provision rate, operating models and weighted provider share of partnerships 42
Provision of road assistance by dealers in Portugal, 2015: provision rate and product sources . 43
Provision of road assistance by manufacturer brands in Portugal, 2015: provision rate, operating models and weighted provider share of partnerships . 45
Provision of GAP insurance by dealers in Portugal, 2015: provision rate and product sources . 46
Provision of GAP insurance by manufacturer brands in Portugal, 2015: provision rate, operating models and weighted provider share of partnerships . 47
Provision of prepaid service contracts by dealers in Portugal, 2015: provision rate, product sources and provider share of non-tied partnerships 49
Provision of prepaid service contracts by manufacturer brands in Portugal, 2015: provision rate, operating models and weighted provider share of partnerships 49

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