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Consumer Automotive Financial Services in Mexico

  • January 2015
  • -
  • Finaccord
  • -
  • 51 pages

Consumer Automotive Financial Services in Mexico investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Mexico. 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 Mexico 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 Mexico
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 new and detailed analysis of the subject in Mexico 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 5
Definitions 6
Finance and leasing products 6
Insurance, warranty and assistance products 7
Operating models 7
Tied and non-tied providers 8
Abbreviations 8
Exchange rate 8
PartnerBASE and market data annexe 8
Finaccord 9
2.0 MARKET ANALYSIS 11
Introduction 11
Passenger vehicle data 12
Sales of new cars grew well in each year between 2010 and 2014. 12
. and have outpaced growth in used car sales over this period 12
VW, Renault Nissan and GM are the dominant manufacturer groups by new car registrations 13
Consumer automotive finance and leasing market 14
Market size and growth 14
By volume, point-of-sale finance for new cars and direct finance for used cars are the largest segments. 14
. with the former accounting for the vast majority of the total market by value 14
Types of finance and leasing product 17
The point-of-sale finance market in Mexico is dominated by simple loans. 17
. although ‘autofinanciamento' schemes are also quite popular 17
Consumer automotive insurance, warranty and assistance markets 17
Market sizes 17
In total, the automotive trade is likely to have sold contracts worth over MXN 20 billion in 2014 18
Survey of automotive dealers and manufacturer brands - overview 20
Introduction 20
Provision of consumer automotive financial services 20
All dealers surveyed in Mexico distribute three core automotive financial services. 20
. but they lag behind manufacturer brands in the provision of prepaid service contracts 20
Number and nature of dealer schemes 22
Dealers typically work with multiple non-tied partners for motor insurance 22
Types of motor insurance policy sold by dealers 24
Comprehensive motor insurance policies are most frequently sold at the point-of-sale 24
A new law enacted in October 2014 is likely to increase penetration of motor insurance in Mexico 24
Sources of road assistance distributed by dealers 25
Road assistance is commonly packaged with extended warranties in Mexico 25
Consumer uptake of automotive financial services through dealers 26
More than two thirds of new car buyers take out finance and leasing at the point of sale. 26
. and this percentage has increased in recent years 26
Take-up rates for new and used car extended warranties have trebled since 2011 26
Survey of automotive dealers and manufacturer brands - partnerships 28
Introduction 28
Finance and leasing 29
At least nine providers of finance and leasing work directly with dealers. 29
… led by BBVA Bancomer, Banorte, BNP Paribas and Scotiabank 29
Autofin is the only non-bank institution competing in this sector 29
Most manufacturer brands offer finance and leasing services through captive providers. 31
…with Volkswagen Financial Services emerging as the single largest captive by weighted share 31
CF Credit Services is the largest external provider based on its on-going relationship with Fiat Chrysler 31
Acura and Honda are unusual in working with multiple external finance providers 31
Two captives are more or less equal as leaders by implied share of new business on a combined analysis… 33
… with the top six competitors likely to account for over 75% of the total market 33
Creditor insurance 34
Several dealers work directly with underwriters for point-of-sale creditor insurance. 34
Excluding indirect links, there are at least nine providers of creditor insurance to manufacturer brands. 36
. among which AXA holds the relationships likely to be most significant 36
Motor insurance 38
The majority of dealers use both tied and non-tied partners for motor insurance. 38
. and these are led by ABA Seguros and Zurich in a fairly fragmented market 38
Manufacturer brands commonly work with multiple providers of motor insurance. 40
. among which ABA Seguros and Quálitas are most prominent in the weighted analysis 40
Five underwriters are likely to account for over three quarters of new point-of-sale business 42
Extended warranties 43
Most dealers promote extended warranties and most of these stick to tied products 43
Internally-managed schemes dominate manufacturer arrangements for extended warranties 45
Road assistance 47
One in five dealers offer road assistance through both tied and non-tied providers 47
Ike Asistencia is by far the most visible road assistance provider to manufacturer brands… 48
…in a highly concentrated market where AMA and MAPFRE Asistencia also feature 48
Prepaid service contracts 50
Prepaid service contracts are on offer from a fairly low proportion of dealers in Mexico. 50
.albeit the provision rate among manufacturer brands is noticeably higher 50

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY 1
Key market data for consumer automotive financial services in Mexico, 2014 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS 11
Passenger car parc and new / used passenger car sales in Mexico, 2010 to 2014 12
Passenger car parc and new / used passenger car sales in Mexico, 2010 to 2014 (table) 13
New car registrations in Mexico, segmented by manufacturer group, 2014 13
New and used passenger car finance market in Mexico, segmented by distribution channel: volumes, 2010 to 2014 14
New and used passenger car finance market in Mexico, segmented by distribution channel: values, 2010 to 2014 15
New and used passenger car finance market in Mexico, segmented by distribution channel: values and volumes, 2010 to 2014 (table) 16
% split between the different types of finance and leasing contract organised at the point of sale in Mexico, 2014 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Mexico, 2014 18
Total revenues from consumer automotive insurance, warranty, assistance and service contracts in Mexico, 2014 (table) 19
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Mexico, 2014 21
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Mexico, 2014 (table) 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Mexico, 2014 23
% split between the different types of motor insurance policy sold at the point of sale in Mexico, 2014 24
% availability of road assistance through factory warranties, annual services, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in Mexico, 2014 25
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Mexico, 2014 27
Provision of finance and leasing by dealers in Mexico, 2014: provision rate, product sources and provider share of non-tied partnerships 30
Provision of finance and leasing by manufacturer brands in Mexico, 2014: provision rate, operating models and weighted provider share of partnerships 32
Implied market shares of new business for finance and leasing at the point of sale in Mexico, 2014 33
Provision of creditor insurance by dealers in Mexico, 2014: provision rate, product sources and provider share of non-tied partnerships 35
Provision of creditor insurance by manufacturer brands in Mexico, 2014: provision rate, operating models and weighted provider share of partnerships 37
Provision of motor insurance by dealers in Mexico, 2014: provision rate, product sources and provider share of non-tied partnerships 39
Provision of motor insurance by manufacturer brands in Mexico, 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 Mexico, 2014 42
Provision of extended warranties by dealers in Mexico, 2014: provision rate, product sources and provider share of non-tied partnerships 44
Provision of extended warranties by manufacturer brands in Mexico, 2014: provision rate, operating models and weighted provider share of partnerships 46
Provision of road assistance by dealers in Mexico, 2014: provision rate and product sources 47
Provision of road assistance by manufacturer brands in Mexico, 2014: provision rate, operating models and weighted provider share of partnerships 49
Provision of prepaid service contracts by dealers in Mexico, 2014: provision rate and product sources 50
Provision of prepaid service contracts by manufacturer brands in Mexico, 2014: provision rate, operating models and weighted provider share of partnerships 51

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