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Consumer Automotive Financial Services in Switzerland

  • February 2016
  • -
  • Finaccord
  • -
  • 51 pages

Consumer Automotive Financial Services in Switzerland investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Switzerland. 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 Switzerland 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 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 CHF 417.8 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 50 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 37 car manufacturer brands in Switzerland. 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 AIG Europe, AMAG Leasing, AXA Winterthur, Bank-now, Basler Versicherungen, CarGarantie, Cembra Money Bank, MultiLease, Real Garant and Touring Club Suisse. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Switzerland.

Table Of Contents

Consumer Automotive Financial Services in Switzerland
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 Switzerland 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
Exchange rate 8
PartnerBASE and market data annexe 8
Finaccord 9
20 MARKET ANALYSIS 10
Introduction 10
Passenger vehicle data 11
Sales of used cars have outgrown new car sales 11
VW, BMW and Renault Nissan share close to a half of the new car market between them 12
Consumer automotive finance and leasing market 13
Market size and growth 13
Point-of-sale finance take-up rates have decreased among buyers of both new and used cars… 13
… causing direct finance for used cars to display the most rapid growth by value 14
Types of finance and leasing product 16
Swiss point-of-sale finance is dominated by financial leasing 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 CHF 400 million in 2015 17
Survey of automotive dealers and manufacturer brands - overview 20
Introduction 20
Provision of consumer automotive financial services 20
Dealer provision rates have changed little and GAP cover is never made available in a stand-alone format 20
Number and nature of dealer schemes 22
Swiss dealers work with non-tied providers for four of the six product types investigated 22
Types of creditor insurance policy sold by dealers 24
The majority of dealers offer creditor insurance policies that encompass comprehensive protection 24
Types of motor insurance policy sold by dealers 25
All dealers selling motor insurance make comprehensive policies available 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
Close to three quarters of those buying used cars from dealerships obtain road assistance from the dealer 27
Customers are more likely to buy extended warranties than motor insurance at the point of sale 27
Survey of automotive dealers and manufacturer brands - partnerships 29
Introduction 29
Finance and leasing 30
Cembra Money Bank is the dominant non-tied provider 30
followed by BANK-now, cashgate and EFL Autoleasing 30
Captives dominate manufacturer-branded finance relationships 32
accounting for close to 80% of the weighted share of partnerships 32
BANK-now holds the most external partnerships with manufacturers 32
The leading firm's share across all partnerships implies that it holds nearly a quarter of new business 34
Creditor insurance 35
Five competitors enjoy direct ties with manufacturer brands 35
led by AIG Europe, Cardif Versicherung and Helvetia 35
Motor insurance 37
AXA Winterthur, Basler Versicherungen and Mobiliar are the most prominent non-tied providers 37
although Zurich takes the highest weighted share of manufacturer brand partnerships 39
A combined analysis assigns an implied market share of almost 35% to the leading competitor 41
Extended warranties 42
Quality1 is the dominant non-tied provider of extended warranties to dealers… 42
… and is also one of four independent warranty providers used by manufacturer brands 44
along with Allianz Global Assistance, CarGarantie and The Warranty Group 44
Two competitors are likely to control over a half of new business in this market 46
Road assistance 47
Over a half of dealers work exclusively with tied providers of road assistance 47
Five providers compete for manufacturer brand mandates for road assistance 48
led by AXA Winterthur, thanks to its relationship with VW group 48
Prepaid service contracts 50
Manufacturer or importer tied propositions are also dominant in this arena 50
… with all products apparently managed on an internal basis 50

LIST OF GRAPHICS / TABLES

00 EXECUTIVE SUMMARY 1
Key market data for consumer automotive financial services in Switzerland, 2015 2
10 INTRODUCTION 3
20 MARKET ANALYSIS 10
Passenger car parc and new / used passenger car sales in Switzerland, 2011 to 2015 11
Passenger car parc and new / used passenger car sales in Switzerland, 2011 to 2015 (table) 12
New passenger car registrations in Switzerland, segmented by manufacturer group, 2015 12
New and used passenger car finance market in Switzerland, segmented by distribution channel: volumes, 2011 to 2015 13
New and used passenger car finance market in Switzerland, segmented by distribution channel: values, 2011 to 2015 14
New and used passenger car finance market in Switzerland, 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 Switzerland, 2015 16
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Switzerland, 2015 18
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Switzerland, 2015 (table) 19
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Switzerland, 2015 21
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Switzerland, 2015 (table) 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Switzerland, 2015 23
% split between the different types of creditor insurance policy sold at the point of sale in Switzerland, 2015 24
% split between the different types of motor insurance policy sold at the point of sale in Switzerland, 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 Switzerland, 2015 26
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Switzerland, 2015 28
Provision of finance and leasing by dealers in Switzerland, 2015: provision rate, product sources and provider share of non-tied partnerships 31
Provision of finance and leasing by manufacturer brands in Switzerland, 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 Switzerland, 2015 34
Provision of creditor insurance by manufacturer brands in Switzerland, 2015: provision rate, operating models and weighted provider share of partnerships 36
Provision of motor insurance by dealers in Switzerland, 2015: provision rate, product sources and provider share of non-tied partnerships 38
Provision of motor insurance by manufacturer brands in Switzerland, 2015: provision rate, operating models and weighted provider share of partnerships 40
Provision of extended warranties by dealers in Switzerland, 2015: provision rate, product sources and provider share of non-tied partnerships 43
Provision of extended warranties by manufacturer brands in Switzerland, 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 Switzerland, 201546
Provision of road assistance by dealers in Switzerland, 2015: provision rate and product sources 47
Provision of road assistance by manufacturer brands in Switzerland, 2015: provision rate, operating models and weighted provider share of partnerships 49
Provision of prepaid service contracts by dealers in Switzerland, 2015: provision rate and product sources 50
Provision of prepaid service contracts by manufacturer brands in Switzerland, 2015: provision rate, operating models and weighted provider share of partnerships 51

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