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Consumer Automotive Financial Services in Malaysia investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Malaysia. In addition to analysing the market for finance and leasing services, the study also covers motor insurance, road assistance and extended warranties plus creditor insurance, GAP insurance and prepaid service contracts.

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 Malaysia is provided in terms of gross advances and assets leased for 2009 to 2013 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 and extended warranties are sized in terms of gross written premiums and other revenues sold through the automotive trade (i.e. via dealers and manufacturers) in 2013. These markets, estimated to be worth over MYR 2.8 billion in total in 2013, are broken down between new and used cars, and between new contracts sold during 2013 and in-force business sold in previous years but still being renewed in 2013.

The report draws on a survey of 60 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 28 car manufacturer brands in Malaysia. 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, AmGeneral Insurance, Asia Assistance Network, CIMB Bank, Etiqa, Hong Leong Bank, Maybank, MSIG Insurance, Public Bank and Tokio Marine Insurans. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Malaysia.

Table Of Contents

Consumer Automotive Financial Services in Malaysia
Table of Contents

Executive Summary

Introduction

Market Analysis

List of Graphics / Tables

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

The focus of the report is on financial services related to the sale of passenger cars to individuals

Rationale

The provision of financial services is essential to support both car sales and profitability

This report offers a detailed updated analysis of the subject in Malaysia based on primary research

Methodology

Survey of dealers and manufacturers

Market data

Computation of market data is based on a complex set of assumptions and variables…

…in order to provide market segmentations in unrivalled detail

External sources

Definitions

Finance and leasing products

Insurance, warranty and assistance products

Operating models

Tied and non-tied providers

Abbreviations

Exchange rate

PartnerBASE and market data annexe

Finaccord

2.0 MARKET ANALYSIS

Introduction

Passenger vehicle data

Sales of new cars in Malaysia rose by nearly 20% between 2009 and 2013...

...but dealers' sales of used cars have been more volatile

Malaysia's domestic manufacturer brands hold over a half of all new car sales

Consumer automotive finance and leasing market

Market size and growth

Point-of-sale finance is very comfortably the dominant method of acquiring new cars...

... and it has grown quite rapidly since 2009 as a result of rising take-up rates

Types of finance and leasing product

The Malaysian point-of-sale finance market splits between standard and Islamic hire purchase

Consumer automotive insurance, warranty and assistance markets

Market sizes In total, the automotive trade is likely to have sold contracts worth over MYR 2.8 billion in 2013

Survey of automotive dealers and manufacturer brands - overview

Introduction

Provision of consumer automotive financial services

Dealers largely concentrate on three core automotive financial services...

...even though many smaller manufacturer brands do not yet offer finance and leasing

Dealers' provision of extended warranties lags behind that of manufacturer brands

Number and nature of dealer schemes

Dealers typically work with more than five finance and leasing providers

Types of motor insurance policy sold by dealers

Most dealers sell both comprehensive standard insurance and Islamic insurance

Sources of road assistance distributed by dealers

Road assistance is widely available with motor insurance in Malaysia

Consumer uptake of automotive financial services through dealers

Point-of-sale take-up rates are extremely high for three products...

...but extended warranties have yet to gain significant traction in Malaysia

Survey of automotive dealers and manufacturer brands - partnerships

Introduction

Finance and leasing

At least 15 providers of finance and leasing work directly with dealers...

... and these are mainly the country's major banks...

... some of which make public disclosures about the magnitude of their vehicle finance operations...

...while both Perodua and Proton work with multiple partners...

...giving Toyota Capital Malaysia a significant share of partnerships as the sole tied partner for Toyota

On a combined analysis, Maybank claims the highest implied share of new business...

... in what is likely to be a fairly fragmented market

Creditor insurance Allianz and AXA Affin are the only underwriters with a 'direct' manufacturer brand relationship in this field

Motor insurance Nearly 30% of dealers use non-tied partners for motor insurance...

...and manufacturer brands' partnerships are shared between as many as 20 underwriters

Perodua and Proton both offer dealers a wide choice of insurance partners

A combined analysis points to Etiqa as a likely market leader for point-of-sale motor insurance

Extended warranties

Dealers only every offer extended warranties proposed by manufacturer brands...

...which are mostly run by the brands themselves and / or their importers...

...with the notable exception of Allianz, which holds a key partnership

Road assistance

The DMM Sales chain of dealerships has set up its own road assistance service...

...and Asia Assistance Network holds the most important external partnership with a manufacturer brand

Prepaid service contracts

Only two manufacturer brands have yet introduced prepaid service contract schemes






LIST OF GRAPHICS / TABLES


0.0 EXECUTIVE SUMMARY

Key market data for consumer automotive financial services in Malaysia, 2013

1.0 INTRODUCTION

2.0 MARKET ANALYSIS

Passenger car parc and new / used passenger car sales in Malaysia, 2009 to 2013

Passenger car parc and new / used passenger car sales in Malaysia, 2009 to 2013 (table)

New car registrations in Malaysia, segmented by manufacturer group, 2013

New and used passenger car finance market in Malaysia, segmented by distribution channel: volumes, 2009 to 2013

New and used passenger car finance market in Malaysia, segmented by distribution channel: values, 2009 to 2013

New and used passenger car finance market in Malaysia, segmented by distribution channel: values and volumes, 2009 to 2013 (table)

% split between the different types of finance and leasing contract organised at the point of sale in Malaysia, 2014

Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Malaysia, 2013

Total revenues from consumer automotive insurance, warranty assistance and service contracts in Malaysia, 2013 (table)

Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Malaysia, 2014

Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Malaysia, 2014

Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Malaysia, 2014 (table)

% split between the different types of motor insurance policy sold at the point of sale in Malaysia, 2014

% availability of road assistance through factory warranties, annual services, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Malaysia, 2014

% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Malaysia, 2014

Provision of finance and leasing by dealers in Malaysia, 2014: provision rate, product sources and provider share of non-tied partnerships

Provision of finance and leasing by manufacturer brands in Malaysia, 2014: provision rate, operating models and weighted provider share of partnerships

Implied market shares of new business for finance and leasing in Malaysia, 2014

Provision of creditor insurance by manufacturer brands in Malaysia, 2014: provision rate and operating models

Provision of motor insurance by dealers in Malaysia, 2014: provision rate, product sources and provider share of non-tied partnerships

Provision of motor insurance by manufacturer brands in Malaysia, 2014: provision rate, operating models and weighted provider share of partnerships

Implied market shares of new business for motor insurance in Malaysia, 2014

Provision of extended warranties by dealers in Malaysia, 2014: provision rate and product sources

Provision of extended warranties by manufacturer brands in Malaysia, 2014: provision rate, operating models and weighted provider share of partnerships

Provision of road assistance by dealers in Malaysia, 2014: provision rate, product sources and provider share of non-tied partnerships

Provision of road assistance by manufacturer brands in Malaysia, 2014: provision rate, operating models and weighted provider share of partnerships

Provision of prepaid service contracts by manufacturer brands in Malaysia, 2014: provision rate, operating models and weighted provider share of partnerships

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