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Consumer Automotive Financial Services in the Czech Republic investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in the Czech Republic. 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 the Czech Republic 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 CZK 7.31 billion 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 the Czech Republic. 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 AXA Assistance, CarGarantie, ?SOB, Essox, Generali, Kooperativa, MetLife, MONETA Money Bank, ÚAMK 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 the Czech Republic.

Table Of Contents

Consumer Automotive Financial Services in the Czech Republic
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 the Czech Republic 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 . 8
Tied and non-tied providers 8
Abbreviations 9
Exchange rate . 9
PartnerBASE and market data annexe 9
Finaccord 9
2.0 MARKET ANALYSIS . 11
Introduction . 11
Passenger vehicle data . 12
Sales of new cars in the Czech Republic have expanded rapidly since 2013 12
VW group has strengthened further its position in the market for new car sales 13
Consumer automotive finance and leasing market 14
Market size and growth 14
Point-of-sale finance has grown much more quickly than direct finance… . 14
… whether measured in terms of value or volume of contracts 15
Types of finance and leasing product 17
More than a half of point-of-sale private car finance takes the form of simple loans… 17
… with complex 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 CZK 7 billion in 2015 18
Survey of automotive dealers and manufacturer brands - overview 21
Introduction 21
Provision of consumer automotive financial services . 21
Three product types register maximum provision rates among both dealers and manufacturer brands. 21
. with dealer enthusiasm for prepaid service contracts having increased markedly . 21
Number and nature of dealer schemes . 23
Czech dealers work with non-tied providers for six of the seven product types investigated . 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 have risen in recent years, especially for used cars… 28
… but cross-selling rates for creditor insurance have slipped back . 28
A majority of both new and used car buyers acquire dealer-intermediated motor insurance . 28
Take-up rates have risen for each of extended warranties, GAP insurance and prepaid service contracts . 28
Survey of automotive dealers and manufacturer brands - partnerships . 30
Introduction 30
Finance and leasing 31
MONETA Money Bank is comfortably the leading non-tied provider. . 31
. in a market in which there are at least seven non-tied competitors . 31
?SOB and UniCredit each claim important manufacturer brand links in the Czech Republic. 33
. although Å koFIN is comfortably the leading tied provider. . 33
. and is likely to be the overall market leader too with an implied market share of just under one third . 35
Creditor insurance . 36
Direct manufacturer brand partnerships are split among three competitors in this field . 36
Motor insurance 38
Seven underwriters are active as non-tied providers of motor insurance to the Czech automotive trade. 38
. while two brokers lay claim to at least one partnership among manufacturer brands 40
Across all types of provider, the leading firm has an implied market share of over a fifth of new business . 42
Extended warranties . 43
Defend Insurance Group is the only apparent non-tied option for dealers… 43
… while CarGarantie is comfortably the leader in terms of manufacturer brand partnerships… . 44
… which means that it is also the dominant provider in the combined analysis . 46
Road assistance . 47
Road assistance is available from the vast majority of dealers in one form or another 47
AXA Assistance benefits from its relationships with five brands belonging to the VW group . 48
GAP insurance 50
The supply structure among non-tied providers of GAP insurance has altered in recent times… . 50
… as a consequence of the sale by QBE of its Czech business . 50
The vast majority of manufacturer brands have an arrangement for selling GAP insurance. 52
. with Allianz most prominent by weighted share of partnerships 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 . 56

LIST OF GRAPHICS / TABLES
0.0 EXECUTIVE SUMMARY . 1
Key market data for consumer automotive financial services in the Czech Republic, 2015 . 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS . 11
Passenger car parc and new / used passenger car sales in the Czech Republic, 2011 to 2015 . 12
Passenger car parc and new / used passenger car sales in the Czech Republic, 2011 to 2015 (table) 13
New passenger car registrations in the Czech Republic, segmented by manufacturer group, 2015 . 13
New and used passenger car finance market in the Czech Republic, segmented by distribution channel: volumes, 2011 to 2015. 14
New and used passenger car finance market in the Czech Republic, segmented by distribution channel: values, 2011 to 2015 15
New and used passenger car finance market in the Czech Republic, 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 the Czech Republic, 2015 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in the Czech Republic, 2015 19
Total revenues from consumer automotive insurance, warranty assistance and service contracts in the Czech Republic, 2015 (table) 20
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in the Czech Republic, 2015 . 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in the Czech Republic, 2015 (table) . 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in the Czech Republic, 2015 . 24
% split between the different types of creditor insurance policy sold at the point of sale in the Czech Republic, 2015 . 25
% split between the different types of motor insurance policy sold at the point of sale in the Czech Republic, 2015 . 26
% availability of road assistance through factory warranties, annual service, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in the Czech Republic, 2015 . 27
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in the Czech Republic, 2015 29
Provision of finance and leasing by dealers in the Czech Republic, 2015: provision rate, product sources and provider share of non-tied partnerships . 32
Provision of finance and leasing by manufacturer brands in the Czech Republic, 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 the Czech Republic, 2015 35
Provision of creditor insurance by manufacturer brands in the Czech Republic, 2015: provision rate, operating models and weighted provider share of partnerships 37
Provision of motor insurance by dealers in the Czech Republic, 2015: provision rate, product sources and provider share of non-tied partnerships 39
Provision of motor insurance by manufacturer brands in the Czech Republic, 2015: provision rate, operating models and weighted provider share of partnerships 41
Provision of extended warranties by dealers in the Czech Republic, 2015: provision rate, product sources and provider share of non-tied partnerships . 44
Provision of extended warranties by manufacturer brands in the Czech Republic, 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 the Czech Republic, 2015 46
Provision of road assistance by dealers in the Czech Republic, 2015: provision rate and product sources . 47
Provision of road assistance by manufacturer brands in the Czech Republic, 2015: provision rate, operating models and weighted provider share of partnerships 49
Provision of GAP insurance by dealers in the Czech Republic, 2015: provision rate, product sources and provider share of non-tied partnerships 51
Provision of GAP insurance by manufacturer brands in the Czech Republic, 2015: provision rate, operating models and weighted provider share of partnerships 53
Provision of prepaid service contracts by dealers in the Czech Republic, 2015: provision rate and product sources . 54
Provision of prepaid service contracts by manufacturer brands in the Czech Republic, 2015: provision rate, operating models and weighted provider share of partnerships 55
Provision of supplementary motor insurance by dealers in the Czech Republic, 2015: provision rate, product sources and provider share of non-tied partnerships . 57
Provision of supplementary motor insurance by manufacturer brands in the Czech Republic, 2015: provision rate, operating models and weighted provider share of partnerships . 57

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