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Consumer Automotive Financial Services in Colombia

  • April 2015
  • -
  • Finaccord
  • -
  • 46 pages

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

Almost twice as many used cars as new cars were sold in Colombia in 2014…

… with the sales trend for both having fluctuated each year since 2010

GM and Renault Nissan are the dominant manufacturer groups by sales of light passenger vehicles

Consumer automotive finance and leasing market

Market size and growth

By volume, point-of-sale finance for new cars and direct finance for used cars are the largest segments...

... with the former accounting for the majority of the total market by value

Types of finance and leasing product

Point-of-sale contracts split between one dominant product and three secondary ones

Consumer automotive insurance, warranty and assistance markets

Market sizes

In total, the automotive trade is likely to have sold contracts worth over COP 825 billion in 2014

Survey of automotive dealers and manufacturer brands - overview

Introduction

Provision of consumer automotive financial services

Most Colombian dealerships focus on four types of automotive financial service…

Number and nature of dealer schemes

… and have more partnerships with non-tied providers than with tied ones

Types of creditor insurance policy sold by dealers

Comprehensive creditor insurance is bundled automatically with point-of-sale finance contracts

Types of motor insurance policy sold by dealers

Motor insurance sold at the point of sale always incorporates both liability and damage / theft cover

Sources of road assistance distributed by dealers

Road assistance is commonly packaged with motor insurance in Colombia

Consumer uptake of automotive financial services through dealers

Point-of-sale take-up rates for motor insurance exceed those for finance and leasing

Survey of automotive dealers and manufacturer brands - partnerships

Introduction

Finance and leasing

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

… led by Bancolombia, BBVA and Banco de Occidente

Finanzauto is the only specialist automotive finance company identified by dealers surveyed

Two thirds of manufacturer brands have an official provider of finance contracts…

… propelling them to a position of leadership in the combined analysis…

… with the top four competitors likely to account for over 80% of the total market

Creditor insurance

Two creditor insurance providers hold direct partnerships with manufacturer brands

Motor insurance

Sura holds the highest weighted share of non-tied partnerships…

… in a sector populated by a high number of product providers

More than half of manufacturer brands work with multiple providers of motor insurance...

... albeit MAPFRE holds two of the key relationships on an exclusive basis

Three underwriters are likely to account for over a half of new point-of-sale business

Extended warranties

Few Colombian dealers have access to extended warranties…

... and only one manufacturer brands is active in this arena

Road assistance

Road assistance is available from most dealers, usually from both tied and non-tied providers

At least one external, specialised assistance provider has picked up manufacturer brand relationships

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY

Key market data for consumer automotive financial services in Colombia, 2014

1.0 INTRODUCTION

2.0 MARKET ANALYSIS

Passenger car parc and new / used passenger car sales in Colombia, 2010 to 2014

Passenger car parc and new / used passenger car sales in Colombia, 2010 to 2014 (table)

New light passenger vehicle registrations in Colombia, segmented by manufacturer group, 2014

New and used passenger car finance market in Colombia, segmented by distribution channel: volumes, 2010 to 2014

New and used passenger car finance market in Colombia, segmented by distribution channel: values, 2010 to 2014

New and used passenger car finance market in Colombia, segmented by distribution channel: values and volumes, 2010 to 2014 (table)

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

Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Colombia, 2014

Total revenues from consumer automotive insurance, warranty, assistance and service contracts in Colombia, 2014 (table)

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

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

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

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

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

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

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

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

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

Implied market shares of new business for finance and leasing at the point of sale in Colombia, 2014

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

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

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

Implied market shares of new business for manufacturer-branded and dealer-intermediated motor insurance in Colombia, 2014

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

Provision of extended warranties by manufacturer brands in Colombia, 2014: provision rate and operating models

Provision of road assistance by dealers in Colombia, 2014: provision rate and product sources

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

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