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Consumer Automotive Financial Services in Chile

  • March 2015
  • -
  • Finaccord
  • -
  • 50 pages

Consumer Automotive Financial Services in Chile investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Chile. In addition to analysing the market for finance and leasing services, the study also covers motor insurance, road assistance, extended warranties, creditor insurance and prepaid service contracts, plus 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 Chile is provided in terms of gross advances and assets leased for 2010 to 2014 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.

Table Of Contents

Consumer Automotive Financial Services in Chile
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 updated analysis of the subject in Chile 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
Currencies, exchange rates and inflation 8
PartnerBASE and market data annexe 8
Finaccord 9
2.0 MARKET ANALYSIS 10
Introduction 10
Passenger vehicle data 10
Both new and used car sales in Chile have grown quite consistently in recent years. 10
. as has the overall car parc 10
Hyundai leads a relatively diverse car market in Chile. 12
. in which manufacturer groups outside of the top ten control over 20% of new car sales 12
Consumer automotive finance and leasing market 13
Market size and growth 13
Point-of-sale finance has tended to outgrow direct lending. 13
. whether measured in volume or value terms 14
Types of finance and leasing product 16
Simple loans constitute by far the most common form of car financing. 16
. although other options are available, including finance leasing 16
Consumer automotive insurance, warranty and assistance markets 18
Market sizes 18
In total, the automotive trade is likely to have sold policies worth nearly CLP 200 billion in 2014 18
Survey of automotive dealers and manufacturer brands - overview 21
Introduction 21
Provision of consumer automotive financial services 21
Chilean dealerships concentrate mainly on four automotive financial services. 21
. with ample scope for growth in extended warranties and prepaid service contracts 21
Number and nature of dealer schemes 23
On average, car dealers in Chile use more than two providers for finance and leasing. 23
Types of creditor insurance policy sold by dealers 25
Basic cover for life and permanent disability is commonly bundled with finance contracts 25
Types of motor insurance policy sold by dealers 26
Comprehensive motor insurance, sometimes in a limited 'total loss' form, is most commonly bought in Chile 26
Sources of road assistance distributed by dealers 27
Road assistance is always packaged with motor insurance but is less common with other products 27
Consumer uptake of automotive financial services through dealers 28
More than half of new car buyers in Chile acquire motor insurance at the point of sale 28
Survey of automotive dealers and manufacturer brands - partnerships 30
Introduction 30
Finance and leasing 31
Fórum Servicios Financieros and Santander Consumer Finance are leading non-tied providers. 31
. followed by Banco Falabella and Tanner Servicios Financieros 31
More than half of manufacturer brands work with external partners for finance and leasing 33
Two non-captive providers account for almost a half of the weighted share of partnerships 33
A large number of providers offer financing independently and through a captive intermediary 33
Three finance providers are likely to control over a half of the market for point-of-sale finance 35
Creditor insurance 36
Most creditor insurance is organised via manufacturer brands' external finance partners. 36
. although Aseguradora Magallanes has one valuable direct partnership 36
Motor insurance 38
Few dealers limit themselves to insurance schemes tied to manufacturers… 38
…with both underwriters and brokers commonly used 38
Mesos Corredora de Seguros is the most prominent broker in this domain 38
A number of manufacturer brands source motor insurance from Marsh. 40
. albeit Bci Seguros Generales claims the highest weighted share of partnerships. 40
. followed by Aseguradora Magallanes and Chilena Consolidada 40
Two insurers are likely to account for over a half of the point-of-sale motor insurance market. 42
. with Liberty Seguros, a major player in the wider market, barely active in this channel 42
Extended warranties 43
A substantial market for extended warranties has yet to develop in Chile 43
Road assistance 45
Where available from non-tied partners, road assistance is usually bundled with motor insurance 45
Four assistance companies compete for partnerships with manufacturer brands 47
. including Auxilia Club Asistencia 47
25 brands have no apparent arrangement for road assistance 47
Prepaid service contracts 49
Prepaid service contracts are a developing feature of the Chilean market… 49
… but are more commonly available from dealers than from manufacturer brands 49

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY 1
Key market data for consumer automotive financial services in Chile, 2014 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS 10
Passenger car parc and new / used passenger car sales in Chile, 2010 to 2014 11
Passenger car parc and new / used passenger car sales in Chile, 2010 to 2014 (table) 11
New car registrations in Chile, segmented by manufacturer group, 2014 12
New and used passenger car finance market in Chile, segmented by distribution channel: volumes, 2010 to 2014 13
New and used passenger car finance market in Chile, segmented by distribution channel: values, 2010 to 2014 14
New and used passenger car finance market in Chile, segmented by distribution channel: values and volumes, 2010 to 2014 (table) 15
% split between the different types of finance and leasing contract organised at the point of sale in Chile, 2014 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Chile, 2014 19
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Chile, 2014 (table) 20
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Chile, 2014 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Chile, 2014 (table) 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Chile, 2014 24
% split between the different types of creditor insurance policy sold at the point of sale in Chile, 2014 25
% split between the different types of motor insurance policy sold at the point of sale in Chile, 2014 26
% availability of road assistance through factory warranties, annual services, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Chile, 2014 27
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Chile, 2014 29
Provision of finance and leasing by dealers in Chile, 2014: provision rate, product sources and provider share of non-tied partnerships 32
Provision of finance and leasing by manufacturer brands in Chile, 2014: 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 Chile, 2014 35
Provision of creditor insurance by manufacturer brands in Chile, 2014: provision rate, operating models and weighted provider share of partnerships 37
Provision of motor insurance by dealers in Chile, 2014: provision rate, product sources and provider share of non-tied partnerships 39
Provision of motor insurance by manufacturer brands in Chile, 2014: provision rate, operating models and weighted provider share of partnerships 41
Implied market shares of new business for manufacturer-branded and dealer-intermediated motor insurance in Chile, 2014 43
Provision of extended warranties by dealers in Chile, 2014: provision rate, product sources and provider share of non-tied partnerships 44
Provision of road assistance by dealers in Chile, 2014: provision rate, operating models and weighted provider share of partnerships 46
Provision of road assistance by manufacturer brands in Chile, 2014: provision rate, operating models and weighted provider share of partnerships 48
Provision of prepaid service contracts by dealers in Chile, 2014: provision rate, product sources and provider share of non-tied partnerships 50
Provision of prepaid service contracts by manufacturer brands in Chile, 2014: provision rate, operating models and weighted provider share of partnerships 50

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