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Finaccord’s report titled Extended Warranties for New and Used Cars in Latin America amalgamates comprehensive and in-depth research covering ten countries in six Latin American countries, namely Argentina, Brazil, Chile, Colombia, Mexico and Peru.

Based on a survey of 395 dealers in these countries and an investigation typically covering between 20 and 40 automotive brands in each territory, 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.

Table Of Contents

Extended Warranties for New and Used Cars in Latin America
Table of Contents

Executive Summary

Introduction

Argentina

Brazil

Chile

Colombia

Mexico

Peru

List of Graphics / Tables

0.0 EXECUTIVE SUMMARY

The regional market for extended warranties amounts to around USD 150 million

Relative to car sales, Mexico appears to host the most developed extended warranty market...

...with Argentina placed second

The great majority of dealers in Mexico offer extended warranties...

… but in Argentina and Brazil, many have yet to distribute the schemes offered by their brands

Assurant is likely to derive the most revenues from extended warranties across the region as a whole…

...with five other independent providers also ranked in the regional top ten…

… and a further seven outside it including several subsidiaries of US-based enterprises

1.0 INTRODUCTION

What is this report about?

The focus of the report is on extended warranties for new and used cars bought by individuals

Rationale

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

This report offers a unique analysis of the subject in Latin America based on primary research

Methodology

Survey of dealers and manufacturers

Market data

Computation of market data is based on a variety of inputs including the results of the dealer survey

External sources

Definitions

Extended warranties

Operating models

Tied and non-tied providers

Abbreviations

Exchange rates

Graphical analyses

PartnerBASE and market data annexe

Finaccord

2.0 REGIONAL OVERVIEW

Passenger vehicle data

Car parc

There are nearly 100 million passenger cars registered in Latin America...

...and this number has risen by over 20 million since 2010

New car sales to individuals

New car sales grew from 2010 to 2013 but then dipped in 2014...

...with weak sales in Brazil counterbalancing growth in smaller markets

Used car sales 25 Brazil hosts the largest used car market in the region, followed by Mexico…

… but dealers play a marginal role in Mexico's used car market due to imports from the US

Sales by manufacturer groups

Across the six countries, GM and VW are the leading manufacturer groups…

...while Fiat's strength in Brazil gives Fiat Chrysler third place at a regional level

Survey of automotive dealers and manufacturer brands

Dealer survey results

Across the six countries, over a third of the dealers researched intermediate extended warranties…

… almost always using just one tied or non-tied provider for this purpose

In two countries, extended warranty provision is entirely based on tied propositions

Overall attachment rates for extended warranties are much lower than average attachment rates…

...because of the high proportion of dealers with no apparent arrangement in this field

Extended warranties are more likely to be bought with used cars than new ones in Brazil

In most countries, there is plainly scope for development of used car extended warranties

Manufacturer brand survey results

In Brazil, the weighted provision rate is high because Chevrolet, Ford and Volkswagen offer this product...

...while an outright majority of brands in Argentina and Mexico offer extended warranties

Operating models used for extended warranties vary substantially by country in Latin America

Market size

Across the region as a whole, the market value is likely to be around USD 150 million…

...with one country dominating the used car segment

The market for extended warranties when compared to the value of car sales is highest in Mexico

Competitor dynamics

Six of the top ten extended warranty providers are independent providers…

... with 13 independent competitors found to be active in total…

… a number of which are owned by US-based organisations

On a weighted analysis, external and internal providers are evenly balanced

3.0 ARGENTINA

Introduction

Passenger vehicle data

Annual sales of new cars were inconsistent between 2010 and 2014...

... with a similar trend observable for used cars

PSA, VW and Fiat Chrysler hold over half of the new passenger vehicle market between them

Survey of automotive dealers and manufacturer brands

Dealer survey results

Dealer provision of extended warranties is dominated by manufacturer and importer contracts

Extended warranties have made progress since 2011, especially with new cars...

Manufacturer brand survey results

... and most manufacturer brands are now active in this arena

Market value

4.0 BRAZIL

Introduction

Passenger vehicle data

Increasing sales of used cars have helped offset the fall in new car sales

Fiat Chrysler leads the light vehicle market in Brazil, ahead of VW and GM

Survey of automotive dealers and manufacturer brands

Dealer survey results

There is plenty of scope to increase extended warranty provision via dealers…

... and several companies are attempting to do so including JMandA Brazil and The Warranty Group

Manufacturer brand survey results

Assurant and Indiana Seguros are the leading providers through manufacturers

Combined analysis of results

A combined analysis suggests that two point-of-sale extended warranty providers control half the market

Market value

5.0 CHILE

Introduction

Passenger vehicle data

Both new and used car sales in Chile have grown quite consistently in recent years...

... as has the overall car parc

Hyundai leads a relatively diverse car market in Chile...

... in which manufacturer groups outside of the top ten control over 20% of new car sales

Survey of automotive dealers and manufacturer brands

Dealer survey results

A substantial market for extended warranties has yet to develop in Chile

Market value

6.0 COLOMBIA

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

Survey of automotive dealers and manufacturer brands

Dealer survey results

Few Colombian dealers have access to extended warranties…

Manufacturer brand survey results

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

7.0 MEXICO

Introduction

Passenger vehicle data

Sales of new cars grew well in each year between 2010 and 2014...

... and have outpaced growth in used car sales over this period

VW, Renault Nissan and GM are the dominant manufacturer groups by new car registrations

Survey of automotive dealers and manufacturer brands

Dealer survey results

Most dealers promote extended warranties and most of these stick to tied products

Manufacturer brand survey results

Internally-managed schemes feature strongly among manufacturer arrangements for extended warranties

Market value

8.0 PERU

Introduction

Passenger vehicle data

Sales of new cars have outpaced used car sales in recent years

Two groups dominate the Peruvian market by new car registrations

Survey of automotive dealers and manufacturer brands

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

Composition of car dealers surveyed by country and by manufacturer group in Latin America, 2015

Composition of manufacturer brands surveyed in Latin America, 2015

2.0 REGIONAL OVERVIEW

Passenger car parc in Latin America by country, 2014

Passenger car parc in Latin America by country, 2010 to 2014 (table)

New passenger car sales to individual customers in Latin America by country, 2010 to 2014

New passenger car sales to individual customers in Latin America by country, 2010 to 2014 (table)

Used passenger car sales in Latin America by country, 2010 to 2014

Used passenger car sales in Latin America by country, 2010 to 2014 (table)

New passenger car registrations in Latin America, segmented by manufacturer group, 2014

New passenger car in Latin America, top 25 manufacturer groups, 2014 (table)

New passenger car sales for the top 11 manufacturing groups in Latin America by country, 2014 (table)

Percentage of dealers offering extended warranties at the point of sale in Latin America by country, 2014

Average number of tied and non-tied providers used by dealers offering extended warranties at the point of sale in Latin America by country, 2014

Average number of tied and non-tied providers used by dealers offering extended warranties at the point of sale in Latin America by country, 2014 (table)

Product sources used by dealers offering extended warranties at the point of sale in Latin America by country, 2014

Product sources used by dealers offering extended warranties at the point of sale in Latin America by country, 2014 (table)

Average % of new car purchasers acquiring extended warranties at the point of sale where offered in Latin America by country, 2014

Overall % of new car purchasers acquiring extended warranties at the point of sale in Latin America by country, 2014

Average % of used car purchasers acquiring extended warranties at the point of sale where offered in Latin America by country, 2014

Overall % of used car purchasers acquiring extended warranties at the point of sale in Latin America by country, 2014

Unweighted and weighted percentage of manufacturer brands with arrangements for branded extended warranties in Latin America by country, 2014

Operating models used by manufacturer brands with arrangements for branded extended warranties in Latin America by country, 2014

Operating models used by manufacturer brands with arrangements for branded extended warranties in Latin America by country, 2014 (table)

Approximate size of the market for extended warranties for new and used cars by country in Latin America, 2014

Approximate size of the market for extended warranties for new and used cars by country in Latin America, 2014 (table)

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 Latin America by country, 2014

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 Latin America, 2014 (table)

Top ten competitors' share of partnerships in Latin America, weighted by % of dealer partnerships, by manufacturer brands' new car registrations, and by the value of extended warranty markets, 2014

Weighted share of partnerships segmented between external and internal providers in Latin America, 2014

3.0 ARGENTINA

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

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

New car registrations in Argentina, segmented by manufacturer group, 2014

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

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

Approximate segmentation of extended warranty gross written premiums and similar revenues in Argentina, 2014

4.0 BRAZIL

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

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

New light vehicle registrations in Brazil, segmented by manufacturer group, 2014

Provision of extended warranties by dealers in Brazil, 2014: provision rate, product sources and provider share of non-tied partnerships

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

Implied market shares of new business for extended warranties in Brazil, 2014

Approximate segmentation of extended warranty gross written premiums and similar revenues in Brazil, 2014

5.0 CHILE

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

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

New car registrations in Chile, segmented by manufacturer group, 2014

Provision of extended warranties by dealers in Chile, 2014: provision rate, product sources and provider share of non-tied partnerships

Approximate segmentation of extended warranty gross written premiums and similar revenues in Chile, 2014

6.0 COLOMBIA

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

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

7.0 MEXICO

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

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

New car registrations in Mexico, segmented by manufacturer group, 2014

Provision of extended warranties by dealers in Mexico, 2014: provision rate, product sources and provider share of non-tied partnerships

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

Approximate segmentation of extended warranty gross written premiums and similar revenues in Mexico, 2014

8.0 PERU

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

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

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

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