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Consumer Automotive Financial Services in Romania

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

Consumer Automotive Financial Services in Romania investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Romania. 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 Romania 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 motor insurance, road assistance, extended warranties, prepaid service contracts and creditor 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 RON 433.6 million (about EUR 97.5 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 50 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 32 car manufacturer brands in Romania. 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 A24 Assistance, Allianz ?iriac, BRD, Europ Assistance, Groupama, Idea Leasing, IMPULS-Leasing, Millennium Assistance, Omniasig and UniCredit. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Romania.

Table Of Contents

Consumer Automotive Financial Services in Romania
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 Romania 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
2.0 MARKET ANALYSIS . 11
Introduction . 11
Passenger vehicle data . 12
New car sales have picked up since the trough of 2013 and used car sales have surged since 2012 . 12
Two manufacturer groups account for a combined market share of new car sales of more than 60% . 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
… whether measured in terms of the volume or value of contracts 15
Types of finance and leasing product 17
Around four out of five point-of-sale private car finance contracts take the form of a financial lease… . 17
… and operating leases have become significantly more popular in recent years . 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 RON 430 million in 2015 18
Survey of automotive dealers and manufacturer brands - overview 21
Introduction 21
Provision of consumer automotive financial services . 21
Romanian dealers focus on distributing six categories of automotive financial service… 21
… with creditor insurance and prepaid service contracts having been introduced to the market 21
Number and nature of dealer schemes . 23
The average number of providers used by dealers for finance and leasing has risen in recent years 23
Types of creditor insurance policy sold by dealers . 25
Where offered, it is more normal for creditor insurance to cover life and / or disability only . 25
Types of motor insurance policy sold by dealers 26
Comprehensive policies are on offer from all Romanian dealerships selling motor insurance 26
Sources of road assistance distributed by dealers . 27
Road assistance is most commonly packaged with factory warranties and prepaid service contracts . 27
Consumer uptake of automotive financial services through dealers . 28
Take-up rates for point-of-sale finance in Romania have risen for both new and used cars… 28
… and are high for several other products, especially among buyers of new cars. 28
Survey of automotive dealers and manufacturer brands - partnerships . 30
Introduction 30
Finance and leasing 31
More than half of dealers utilise both tied and non-tied providers of finance and leasing products. 31
. with Idea Leasing and BCR emerging as the favoured non-tied partners . 31
The purchase by Getin Holding of VB Leasing has endowed it with a prominent position in this market 31
Only one manufacturer brand in Romania has no arrangement for branded finance or leasing. 33
. with almost 60% of those active in this sphere having linked with one specific external finance provider . 33
When viewed in weighted terms, four competitors are dominant 33
Across all types of provider, the leading firm has an implied market share of new business of almost 20% 35
Creditor insurance . 36
Three manufacturer brands have a partnership for this product 36
Motor insurance 37
All dealers in Romania intermediate motor insurance and most utilise non-tied providers…. 37
. with Groupama and Omniasig employed most regularly in this context . 37
Allianz ?iriac is utilised as a preferred provider of motor insurance by as many as 19 brands… 39
… making it the closest rival to Groupama and Omniasig in the weighted analysis for this product . 41
Extended warranties . 42
Extended warranties are promoted by around two thirds of dealers in Romania… . 42
… and by most significant manufacturer brands 42
Road assistance . 44
A handful of dealers organise road assistance from sources other than their manufacturer brands . 44
Five manufacturer brands organise their own assistance service on an internal basis. . 46
. although at least three quarters of them collaborate with a single, external assistance provider . 46
Prepaid service contracts . 48
The market for prepaid service contracts is mainly dominated by manufacturer-branded products 48

LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY . 1
Key market data for consumer automotive financial services in Romania, 2015 . 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS . 11
Passenger car parc and new / used passenger car sales in Romania, 2011 to 2015 . 12
Passenger car parc and new / used passenger car sales in Romania, 2011 to 2015 (table) . 13
New passenger car registrations in Romania, segmented by manufacturer group, 2015 . 13
New and used passenger car finance market in Romania, segmented by distribution channel: volumes, 2011 to 2015 . 14
New and used passenger car finance market in Romania, segmented by distribution channel: values, 2011 to 2015 . 15
New and used passenger car finance market in Romania, 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 Romania, 2016 . 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Romania, 2015 . 19
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Romania, 2015 (table) . 20
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Romania, 2016. 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Romania, 2016 (table) . 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Romania, 2016 24
% split between the different types of creditor insurance policy sold at the point of sale in Romania, 2016 . 25
% split between the different types of motor insurance policy sold at the point of sale in Romania, 2016 . 26
% availability of road assistance through factory warranties, annual service, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Romania, 2016 27
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Romania, 2016 . 29
Provision of finance and leasing by dealers in Romania, 2015: provision rate, product sources and provider share of non-tied partnerships 32
Provision of finance and leasing by manufacturer brands in Romania, 2015: provision rate, operating models and weighted provider share of partnerships 34
Implied market shares of new business for finance and leasing at the point of sale in Romania, 2015 . 35
Provision of creditor insurance by manufacturer brands in Romania, 2015: provision rate, operating models 36
Provision of motor insurance by dealers in Romania, 2015: provision rate, product sources and provider share of non-tied partnerships . 38
Provision of motor insurance by manufacturer brands in Romania, 2015: provision rate, operating models and weighted provider share of partnerships . 40
Provision of extended warranties by dealers in Romania, 2015: provision rate and product sources 42
Provision of extended warranties by manufacturer brands in Romania, 2015: provision rate, operating models and weighted provider share of partnerships 43
Provision of road assistance by dealers in Romania, 2015: provision rate and product sources and weighted provider share of partnerships . 45
Provision of road assistance by manufacturer brands in Romania, 2015: provision rate, operating models and weighted provider share of partnerships . 47
Provision of prepaid service contracts by dealers in Romania, 2015: provision rate, product sources 48
Provision of prepaid service contracts by manufacturer brands in Romania, 2015: provision rate, operating models and weighted provider share of partnerships 49

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