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Finaccord’s report titled Extended Warranties for New and Used Cars in the Asia-Pacific Region amalgamates comprehensive and in-depth research covering ten countries in the Asia-Pacific region, namely: China, India, Indonesia, Japan, Malaysia, the Philippines, South Korea, Taiwan, Thailand and Vietnam. Based on a survey of 680 dealers in these countries and an investigation typically covering between 25 and 35 automotive brands in each territory (albeit with a maximum of more than 70 in China), the study delivers unique insights into the market for extended warranties for new and used passenger cars bought by consumers. Moreover, the research also generates data describing the size, in terms of gross written premiums and other revenues, for the market for extended warranties for new and used cars in each country. In addition to this unique market data, the survey results are also used to measure the extent to which automotive dealers and manufacturer brands actually organise and intermediate extended warranties in each country, to calculate average customer take-up rates for extended warranties at the point of sale, and to understand relationships between manufacturers or importers and external warranty providers for branded or endorsed programs.

Table Of Contents

Extended Warranties for New and Used Cars in the Asia-Pacific Region
0.0 EXECUTIVE SUMMARY 1
Gross written premiums and similar revenues for extended warranties amount to almost USD 1.5 billion 2
Relative to new car sales, India appears to host the most developed extended warranty market 3
with Japan scoring highest on this measure for used car extended warranties 3
and Thailand third when looking at all car sales 3
It is more common for manufacturer brands to have an extended warranty than for dealers to sell them… 4
… in all countries apart from China and (by a very narrow margin) Indonesia 4
Toyota group is likely to derive the most revenues from extended warranties across the region as a whole… 5
albeit the size of the Chinese and Indian markets boosts the positions of SAIC group and of Suzuki 6
In contrast to Europe and North America, there are few independent warranty providers in the region 6
1.0 INTRODUCTION 8
What is this report about? 8
The focus of the report is on extended warranties for new and used cars bought by individuals 8
Rationale 8
The provision of financial services is essential to support both car sales and profitability 8
This report offers a unique analysis of the subject in the Asia-Pacific region based on primary research 8
Methodology 8
Survey of dealers and manufacturers 8
Market data 12
Computation of market data is based on a variety of inputs including the results of the dealer survey 12
External sources 12
Definitions 13
Extended warranties 13
Operating models 13
Tied and non-tied providers 14
Abbreviations 14
Exchange rates 14
Graphical analyses 14
PartnerBASE and market data annexe 15
Finaccord 15
2.0 REGIONAL OVERVIEW 17
Passenger vehicle data 17
Car parc 17
There are more than 200 million passenger cars registered in the Asia-Pacific region 17
and two thirds of the growth recorded since 2009 has come from China alone 17
New car sales to individuals 18
New car sales rose by a compound annual rate of more than 10% between 2009 and 2013 18
with the fastest growth rates recorded in Indonesia and Thailand 18
New car sales in China have been fundamental to growth in the wider Asia-Pacific region 19
Used car sales 21
Japan hosts the largest used car market in the region 21
followed by China, India, South Korea and Indonesia 21
Sales by manufacturer groups 24
Across the ten countries Toyota group is the leading manufacturer group… 24
with five joint ventures based in China featuring in the top ten 24
Survey of automotive dealers and manufacturer brands 27
Dealer survey results 27
Across the region, nearly half of the dealers surveyed promote extended warranties 27
and this figure exceeds 80% in two of the ten countries 27
Dealers in Indonesia utilise the highest number of extended warranty providers 28
while those in India, Malaysia, South Korea and Thailand rely most on tied schemes 30
Japan registers the highest overall take-up rate for extended warranties on new cars 32
but this figure falls below 2% in Malaysia 32
Extended warranties are more likely to be bought with used cars than new ones in two countries… 33
but overall take-up rates are below 10% for used car customers in all countries apart from three 33
Manufacturer brand survey results 37
In South Korea, the weighted provision rate is high because both Hyundai and Kia offer this product 37
while in Japan, only three small manufacturer brands lack an extended warranty scheme 38
A comparison of key provision and take-up rates points to Taiwan and Thailand as potential opportunities 38
Most extended warranty programs in the Asia-Pacific region are operated internally… 39
although both Allianz and MAPFRE have forged a handful of partnerships… 40
… and a few joint ventures are also in evidence 40
Market size 42
Across the region as a whole, the market value is likely to be close to USD 1.5 billion… 42
and the three largest markets together amount to 85% of this total 42
The market for extended warranties when compared to the value of new car sales is highest in India 44
while Japan has the most valuable market for used car extended warranties on this measure 44
Competitor dynamics 46
The leading providers in the Asia-Pacific region are the manufacturer groups themselves 46
and the three leading competitors are all Japan-based groups 47
SAIC group is the leading China-based competitor 47
with GM as the only US group in the top five 47
Tianan Insurance is the leading independent provider as a result of a key partnership in China… 47
… with Allianz and MAPFRE the most visible international providers 48
On a weighted analysis, manufacturer groups are likely to account for the lion's share of the market value 50
3.0 CHINA 51
Introduction 51
Passenger vehicle data 51
Sales of used cars have grown faster than new car sales between 2009 and 2013 51
Joint venture brands and groups are the leading players in the automotive market 53
Survey of automotive dealers and manufacturer brands 54
Dealer survey results 54
MAPFRE Warranty has a partnership with the China Grand Auto dealership group 54
Extended warranties have become much more common since 2011 54
Manufacturer brand survey results 56
The majority of manufacturer brands with an extended warranty scheme operate it themselves 56
though CarGarantie is looking to establish partnerships with dealers and manufacturers in China 56
Combined analysis of results 58
More than one-third of extended warranty products are run by dealers themselves 58
Market value 59
4.0 INDIA 60
Introduction 60
Passenger vehicle data 60
Sales of new cars in India have exceeded 2.5 million for the past four years 60
but the growth of used car sales has been both more rapid and more consistent 60
Maruti Suzuki occupies a dominant position in the market for new passenger vehicles 62
Survey of automotive dealers and manufacturer brands 63
Dealer survey results 63
Extended warranty provision by dealers is almost always organised through tied providers 63
Manufacturer brand survey results 64
Two insurers have won mandates with manufacturer brands as external providers 64
Market value 66
5.0 INDONESIA 67
Introduction 67
Passenger vehicle data 67
Sales of new cars in Indonesia more than doubled between 2009 and 2013 67
with used car sales also advancing at a healthy rate over the same period 67
Japanese manufacturers dominate the Indonesian market for new vehicle sales 69
Survey of automotive dealers and manufacturer brands 70
Dealer survey results 70
The dealer provision rate for extended warranties remains modest 70
Manufacturer brand survey results 72
Few manufacturer brands have yet launched schemes in this area 72
Market value 74
6.0 JAPAN 75
Introduction 75
Passenger vehicle data 75
Sales of new cars outgrew used car sales between 2009 and 2013 75
Japanese brands and groups dominate the market for new car sales 77
Survey of automotive dealers and manufacturer brands 78
Dealer survey results 78
Extended warranty provision is dominated by tied manufacturer or importer schemes 78
although dealers specialising in sales of used cars employ a mixed bag of alternative providers 78
Manufacturer brand survey results 80
Virtually all manufacturer brands offer internally-managed extended warranties 80
Combined analysis of results 82
Toyota group is the leading provider, while MAPFRE Warranty has joined forces with Aioi Nissay Dowa 82
Market value 83
7.0 MALAYSIA 84
Introduction 84
Passenger vehicle data 84
Sales of new cars in Malaysia rose by nearly 20% between 2009 and 2013 84
but dealers' sales of used cars have been more volatile 84
Malaysia's domestic manufacturer brands hold over a half of all new car sales 86
Survey of automotive dealers and manufacturer brands 87
Dealer survey results 87
Dealers only ever offer extended warranties proposed by manufacturer brands 87
Manufacturer brand survey results 88
Manufacturer brands mostly run their extended warranty schemes by themselves and / or their importers 88
with the notable exception of Allianz, which holds a key partnership 88
Market value 90
8.0 PHILIPPINES 91
Introduction 91
Passenger vehicle data 91
Sales of new cars in the Philippines exceeded 60,000 for the first time in 2013 91
and used car sales have been growing even faster 91
Toyota and Mitsubishi hold over half of the new passenger vehicle market between them 93
Survey of automotive dealers and manufacturer brands 94
Dealer survey results 94
Some major chains of dealers have their own extended warranty programs 94
Manufacturer brand survey results 96
Few manufacturer brands have organised this product 96
9.0 SOUTH KOREA 98
Introduction 98
Passenger vehicle data 98
Passenger vehicle data 98
The Korean market for new car sales has slipped back somewhat in recent years… 98
…although volumes in the used car market have moved up substantially 98
Hyundai and Kia are the dominant car manufacturer brands… 100
although they have lost some ground to fast-growing foreign competitors 100
Survey of automotive dealers and manufacturer brands 101
Dealer survey results 101
It is almost entirely the case that dealers limit themselves to selling manufacturer extended warranties only 101
Manufacturer brand survey results 102
Nine of the 26 manufacturer brands investigated are running extended warranty programs 102
Market value 104
10.0 TAIWAN 105
Introduction 105
Passenger vehicle data 105
Sales of new cars easily outpaced used car sales between 2009 and 2013 105
Toyota is the leading manufacturer group accounting for 30% of new cars sold in 2013 107
Survey of automotive dealers and manufacturer brands 107
Dealer survey results 107
A significant proportion of Taiwanese dealers are now offering extended warranties 107
Manufacturer brand survey results 108
A minority of manufacturer brands have launched their own schemes 108
Combined analysis of results 110
Apart from dealers' own schemes, one (international) external provider is active in this field 110
Market value 111
11.0 THAILAND 112
Introduction 112
Passenger vehicle data 112
New car sales more than doubled between 2009 and 2013… 112
…while used cars are still mostly sold outside the dealer channel 112
Honda displaced Toyota as Thailand's leading passenger car manufacturer in 2013 114
Survey of automotive dealers and manufacturer brands 114
Dealer survey results 114
Dealer provision rates for extended warranties have grown hugely in recent years 114
Manufacturer brand survey results 115
Over a half of all manufacturer brands now running a scheme in this arena 115
Market value 117
12.0 VIETNAM 118
Introduction 118
Passenger vehicle data 118
Trends in new car sales are heavily influenced by taxes imposed on imported vehicles 118
and reduced taxes on used cars since April 2013 have stimulated this market 118
Toyota sells nearly four times as many new vehicles as the next closest competitor 120
Survey of automotive dealers and manufacturer brands 121
Dealer survey results 121
The majority of dealers offering extended warranties utilise their manufacturers' tied schemes 121
Manufacturer brand survey results 122
Ford, Honda and Mazda are the main brands active in this sphere 122
Market value 124

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY 1
1.0 INTRODUCTION 8
Composition of car dealers surveyed by country and by manufacturer group in the Asia-Pacific region,
2014 9
Composition of manufacturer brands surveyed in the Asia-Pacific region, 2014 11
Assumed average annualised cost of extended warranties for new and used cars in the Asia-Pacific
region by country, 2013 12
2.0 REGIONAL OVERVIEW 17
Passenger car parc in the Asia-Pacific region by country, 2013 18
New passenger car sales to individual customers in the Asia-Pacific region, 2009 to 2013 19
New passenger car sales to individual customers in the Asia-Pacific region by country, 2013 20
New passenger car sales to individual customers in the Asia-Pacific region by country, 2009 to 2013 21
Used passenger car sales in the Asia-Pacific region, 2009 to 2013 22
Used passenger car sales in the Asia-Pacific region by country, 2013 23
Used passenger car sales in the Asia-Pacific region by country, 2009 to 2013 23
New passenger car registrations in the Asia-Pacific region, segmented by manufacturer group, 2013 25
New passenger car registrations in the Asia-Pacific region, top 30 manufacturer groups, 2013 (table) 26
Percentage of dealers offering extended warranties at the point of sale in the Asia-Pacific region by
country, 2014 28
Average number of tied and non-tied providers used by dealers offering extended warranties at the point
of sale in the Asia-Pacific region by country, 2014 29
Average number of tied and non-tied providers used by dealers offering extended warranties at the point
of sale in the Asia-Pacific region by country, 2014 (table) 30
Product sources used by dealers offering extended warranties at the point of sale in the Asia-Pacific
region by country, 2014 31
Product sources used by dealers offering extended warranties at the point of sale in the Asia-Pacific
region by country, 2014 (table) 32
Average % of new car purchasers acquiring extended warranties at the point of sale where offered in the
Asia-Pacific region by country, 2014 34
Overall % of new car purchasers acquiring extended warranties at the point of sale in the Asia-Pacific
region by country, 2014 35
Average % of used car purchasers acquiring extended warranties at the point of sale where offered in the
Asia-Pacific region by country, 2014 36
Overall % of used car purchasers acquiring extended warranties at the point of sale in the Asia-Pacific
region by country, 2014 37
Unweighted and weighted percentage of manufacturer brands with arrangements for branded extended
warranties in the Asia-Pacific region by country, 2014 39
Operating models used by manufacturer brands with arrangements for branded extended warranties in
the Asia-Pacific region by country, 2014 41
Operating models used by manufacturer brands with arrangements for branded extended warranties in
the Asia-Pacific region by country, 2014 (table) 42
Approximate size of the market for extended warranties for new and used cars by country in the Asia-
Pacific region, 2013 43
Approximate size of the market for extended warranties for new and used cars in the Asia-Pacific region
by country, 2013 (table) 44
Approximate size of the market for extended warranties for new and used cars as a percentage of the
value of underlying sales of new and used cars in the Asia-Pacific region by country, 2013 45
Approximate size of the market for extended warranties for new and used cars as a percentage of the
value of underlying sales of new and used cars by country in the Asia-Pacific region, 2013 (table) 46
Top ten competitors' share of partnerships in the Asia-Pacific region, weighted by % of dealer
partnerships, by manufacturer brands' new car registrations, and by the value of extended warranty
markets, 2014 49
Weighted share of partnerships segmented between external and internal providers in the Asia-Pacific
region, 2014 50
3.0 CHINA 51
Passenger car parc and new / used passenger car sales in China, 2009 to 2013 52
Passenger car parc and new / used passenger car sales in China, 2009 to 2013 (table) 52
New car registrations in China, segmented by manufacturer group, 2013 53
Provision of extended warranties by dealers in China, 2014: provision rate, product sources and provider
share of non-tied partnerships 55
Provision of extended warranties by manufacturer brands in China, 2014: provision rate, operating models
and weighted provider share of partnerships 57
Implied market shares of new business for extended warranties in China, 2014 58
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in China, 2013 59
4.0 INDIA 60
Passenger car parc and new / used passenger car sales in India, 2009 to 2013 61
Passenger car parc and new / used passenger car sales in India, 2009 to 2013 (table) 61
New passenger vehicle registrations in India, segmented by manufacturer group, 2013 62
Provision of extended warranties by dealers in India, 2014: provision rate and product sources 63
Provision of extended warranties by manufacturer brands in India, 2014: provision rate, operating models
and weighted provider share of partnerships 65
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in India, 2013 66
5.0 INDONESIA 67
Passenger car parc and new / used passenger car sales in Indonesia, 2009 to 2013 68
Passenger car parc and new / used passenger car sales in Indonesia, 2009 to 2013 (table) 68
New vehicle registrations in Indonesia, segmented by manufacturer group, 2013 69
Provision of extended warranties by dealers in Indonesia, 2014: provision rate, product sources and
provider share of non-tied partnerships 71
Provision of extended warranties by manufacturer brands in Indonesia, 2014: provision rate, operating
models and weighted provider share of partnerships 73
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in Indonesia, 2013 74
6.0 JAPAN 75
Passenger car parc and new / used passenger car sales in Japan, 2009 to 2013 76
Passenger car parc and new / used passenger car sales in Japan, 2009 to 2013 (table) 76
New car registrations in Japan, segmented by manufacturer group, 2012 77
Provision of extended warranties by dealers in Japan, 2013: provision rate, product sources and provider
share of non-tied partnerships 79
Provision of extended warranties by manufacturer brands in Japan, 2013: provision rate, operating
models and weighted provider share of partnerships 81
Implied market shares of new business for extended warranties at the point of sale in Japan, 2013 82
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in Japan, 2013 83
7.0 MALAYSIA 84
Passenger car parc and new / used passenger car sales in Malaysia, 2009 to 2013 85
Passenger car parc and new / used passenger car sales in Malaysia, 2009 to 2013 (table) 85
New vehicle registrations in Malaysia, segmented by manufacturer group, 2013 86
Provision of extended warranties by dealers in Malaysia, 2014: provision rate and product sources 87
Provision of extended warranties by manufacturer brands in Malaysia, 2014: provision rate, operating
models and weighted provider share of partnerships 89
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in Malaysia, 2013 90
8.0 PHILIPPINES 91
Passenger car parc and new / used passenger car sales in the Philippines, 2009 to 2013 92
Passenger car parc and new / used passenger car sales in the Philippines, 2009 to 2013 (table) 92
New light passenger vehicle registrations in the Philippines, segmented by manufacturer group, 2013 93
Provision of extended warranties by dealers in the Philippines, 2014: provision rate, product sources and
provider share of non-tied partnerships 95
Provision of extended warranties by manufacturer brands in the Philippines, 2014: provision rate,
operating models and weighted provider share of partnerships 97
9.0 SOUTH KOREA 98
Passenger car parc and new / used passenger car sales in South Korea, 2009 to 2013 99
Passenger car parc and new / used passenger car sales in South Korea, 2009 to 2013 (table) 99
New car registrations in South Korea, segmented by manufacturer group, 2013 100
Provision of extended warranties by dealers in South Korea, 2014: provision rate and product sources 101
Provision of extended warranties by manufacturer brands in South Korea, 2014: provision rate, operating
models and weighted provider share of partnerships 103
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in South Korea, 2013 104
10.0 TAIWAN 105
Passenger car parc and new / used passenger car sales in Taiwan, 2009 to 2013 106
Passenger car parc and new / used passenger car sales in Taiwan, 2009 to 2013 (table) 106
New car registrations in Taiwan, segmented by manufacturer group, 2013 107
Provision of extended warranties by dealers in Taiwan, 2014: provision rate and product sources 108
Provision of extended warranties by manufacturer brands in Taiwan, 2014: provision rate, operating
models and weighted provider share of partnerships 109
Implied market shares of new business for extended warranties at the point of sale in Taiwan, 2014 110
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in Taiwan, 2013 111
11.0 THAILAND 112
Passenger car parc and new / used passenger car sales in Thailand, 2009 to 2013 113
Passenger car parc and new / used passenger car sales in Thailand, 2009 to 2013 (table) 113
New car registrations in Thailand, segmented by manufacturer group, 2013 114
Provision of extended warranties by dealers in Thailand, 2014: provision rate and product sources 115
Provision of extended warranties by manufacturer brands in Thailand, 2014: provision rate, operating
models and weighted provider share of partnerships 116
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in Thailand, 2013 117
12.0 VIETNAM 118
Passenger car parc and new / used passenger car sales in Vietnam, 2009 to 2013 119
Passenger car parc and new / used passenger car sales in Vietnam, 2009 to 2013 (table) 120
New light passenger vehicle registrations in Vietnam, segmented by manufacturer group, 2013 121
Provision of extended warranties by dealers in Vietnam, 2014: provision rate and product sources 122
Provision of extended warranties by manufacturer brands in Vietnam, 2014: provision rate, operating
models and weighted provider share of partnerships 123
Approximate value and segmentation of extended warranty gross written premiums and similar revenues
in Vietnam, 2013 124

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