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Consumer Automotive Financial Services in Slovakia

  • July 2016
  • -
  • Finaccord
  • -
  • 59 pages

Consumer Automotive Financial Services in Slovakia investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Slovakia. 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, GAP insurance and supplementary motor 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 Slovakia 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 and supplementary motor 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 91.8 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 31 car manufacturer brands in Slovakia. 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 Allianz, Autoklub Slovakia Assistance, CarGarantie, ?SOB, Generali, Kooperativa, Quatro, Tatra Banka, UniCredit Leasing and UNIQA. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Slovakia.

Table Of Contents

Consumer Automotive Financial Services in Slovakia
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 analysis of the subject in Slovakia 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 . 5
Definitions . 6
Finance and leasing products 6
Insurance, warranty and assistance products . 6
Operating models . 8
Tied and non-tied providers 8
Abbreviations 8
PartnerBASE and market data annexe 8
Finaccord 9
2.0 MARKET ANALYSIS . 11
Introduction . 11
Passenger vehicle data . 12
Sales of used cars in Slovakia have been outpacing sales of new cars . 12
VW group's market share of new car sales has slipped back somewhat in recent years 13
Consumer automotive finance and leasing market 14
Market size and growth 14
Point-of-sale finance for used cars has been the most rapidly growing segment . 14
… although its value is still less than that of direct finance for used cars 15
Types of finance and leasing product 17
More than a half of point-of-sale private car finance takes the form of finance leases… . 17
… with simple loans the next most popular choice for finance organised via dealers 17
Consumer automotive insurance, warranty and assistance markets . 18
Market sizes 18
In total, the automotive trade is likely to have sold contracts worth more than EUR 90 million in 2015 . 18
Survey of automotive dealers and manufacturer brands - overview 21
Introduction 21
Provision of consumer automotive financial services . 21
Two product types register maximum provision rates among both dealers and manufacturer brands . 21
Number and nature of dealer schemes . 23
Slovak dealers are making increased use of non-tied providers of finance and leasing 23
Types of creditor insurance policy sold by dealers . 25
Dealers only offer creditor insurance policies that encompass comprehensive protection 25
Types of motor insurance policy sold by dealers 26
Comprehensive motor insurance policies are on offer from all Czech dealerships surveyed 26
Sources of road assistance distributed by dealers . 27
Road assistance is most commonly packaged with manufacturer factory warranties and motor insurance . 27
Consumer uptake of automotive financial services through dealers . 28
Take-up rates for point-of-sale finance among used car buyers have risen in recent years 28
Two thirds of new car buyers and a half of used car buyers acquire dealer-intermediated motor insurance 28
Survey of automotive dealers and manufacturer brands - partnerships . 30
Introduction 30
Finance and leasing 31
?SOB and Tatra Banka are the leading non-tied providers… . 31
… with the former having boosted its position through the purchase of the Slovak business of VB Leasing 31
Three external finance providers hold manufacturer brand relationships in Slovakia. 33
. albeit Volkswagen Finan?ne Služby Slovensko is comfortably the leading tied provider . 33
?SOB is likely to be the overall market leader with an implied market share of 19% . 35
Creditor insurance . 36
One insurer is almost completely dominant as a direct provider among manufacturer brands . 36
Motor insurance 38
The most visible non-tied provider attains this prominence by default. . 38
. due to its lack of manufacturer brand relationships 38
Five underwriters work with manufacturer brands, normally on an indirect basis via finance providers. . 40
. the companies in question being Allianz, ?SOB Pois?ov?a, Generali, Kooperativa and UNIQA 40
Across all types of provider, the leading firm has an implied market share of nearly 30% of new business . 42
Extended warranties . 43
Most dealers stick to promoting only the extended warranties organised by manufacturer brands 43
CarGarant, CarGarantie and Real Garant all hold manufacturer brand partnerships 44
A combined analysis assigns an implied 45% market share to the leading competitor . 46
Road assistance . 47
Road assistance is available from the vast majority of dealers in one form or another 47
Four assistance firms hold at least one partnership for manufacturer-branded road assistance . 48
GAP insurance 50
Allianz and UNIQA are the leading non-tied providers of GAP insurance… . 50
… with QBE having discontinued its operations in Slovakia 50
BNP Paribas Cardif is likely to secure the most business as a partner of manufacturer brands . 52
Prepaid service contracts . 54
The dealers active in this field offer only prepaid service contracts organised by manufacturer brands. 54
.and all of their products are apparently managed on an internal basis 54
Supplementary motor insurance 56
The leaders in this domain are essentially the same as those already identified for motor insurance. 56
. irrespective of whether the analysis is of non-tied or tied providers . 58

LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY . 1
Key market data for consumer automotive financial services in Slovakia, 2015 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS . 11
Passenger car parc and new / used passenger car sales in Slovakia, 2011 to 2015 12
Passenger car parc and new / used passenger car sales in Slovakia, 2011 to 2015 (table) 13
New passenger car registrations in Slovakia, segmented by manufacturer group, 2015 13
New and used passenger car finance market in Slovakia, segmented by distribution channel: volumes, 2011 to 2015 . 14
New and used passenger car finance market in Slovakia, segmented by distribution channel: values, 2011 to 2015 . 15
New and used passenger car finance market in Slovakia, 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 Slovakia, 2015 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Slovakia, 2015 19
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Slovakia, 2015 (table) 20
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Slovakia, 2016 . 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Slovakia, 2016 (table) 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Slovakia, 2016 . 24
% split between the different types of creditor insurance policy sold at the point of sale in Slovakia, 201625
% split between the different types of motor insurance policy sold at the point of sale in Slovakia, 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 Slovakia, 2016 . 27
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Slovakia, 2016 29
Provision of finance and leasing by dealers in Slovakia, 2015: provision rate, product sources and provider share of non-tied partnerships 32
Provision of finance and leasing by manufacturer brands in Slovakia, 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 Slovakia, 2015 35
Provision of creditor insurance by manufacturer brands in Slovakia, 2015: provision rate, operating models and weighted provider share of partnerships 37
Provision of motor insurance by dealers in Slovakia, 2015: provision rate, product sources and provider share of non-tied partnerships . 39
Provision of motor insurance by manufacturer brands in Slovakia, 2015: provision rate, operating models and weighted provider share of partnerships . 41
Provision of extended warranties by dealers in Slovakia, 2015: provision rate and product sources . 43
Provision of extended warranties by manufacturer brands in Slovakia, 2015: provision rate, operating models and weighted provider share of partnerships 45
Implied market shares of new business for extended warranties at the point of sale in Slovakia, 2015 46
Provision of road assistance by dealers in Slovakia, 2015: provision rate and product sources 47
Provision of road assistance by manufacturer brands in Slovakia, 2015: provision rate, operating models and weighted provider share of partnerships . 49
Provision of GAP insurance by dealers in Slovakia, 2015: provision rate, product sources and provider share of non-tied partnerships . 51
Provision of GAP insurance by manufacturer brands in Slovakia, 2015: provision rate, operating models and weighted provider share of partnerships . 53
Provision of prepaid service contracts by dealers in Slovakia, 2015: provision rate and product sources . 54
Provision of prepaid service contracts by manufacturer brands in Slovakia, 2015: provision rate, operating models and weighted provider share of partnerships 55
Provision of supplementary motor insurance by dealers in Slovakia, 2015: provision rate, product sources and provider share of non-tied partnerships . 57
Provision of supplementary motor insurance by manufacturer brands in Slovakia, 2015: provision rate, operating models and weighted provider share of partnerships 59

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