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Consumer Automotive Financial Services in Taiwan

  • April 2014
  • -
  • Finaccord
  • -
  • 55 pages

Consumer Automotive Financial Services in Taiwan investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Taiwan. In addition to analysing the market for finance and leasing services, the study also covers motor insurance, road assistance, extended warranties and prepaid service contracts plus creditor and 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 Taiwan is provided in terms of gross advances and assets leased for 2009 to 2013 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.

Moreover, also by means of data for average take-up rates, the markets for motor insurance, road assistance, extended warranties and prepaid service contracts are sized in terms of gross written premiums and other revenues sold through the automotive trade (i.e. via dealers and manufacturers) in 2013. These markets, estimated to be worth almost TWD 19.3 billion in total in 2013, are broken down between new and used cars, and between new contracts sold during 2013 and in-force business sold in previous years but still being renewed in 2013.

The report draws on a survey of 60 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 25 car manufacturer brands in Taiwan. The PartnerBASE™ dataset that accompanies the report details each of the marketing initiatives for consumer automotive financial services traced by Finaccord for both dealers and manufacturers; a market data annexe is also available in a convenient spreadsheet format so that there is no need to re-enter key data points from the report.

In addition to captive finance companies owned by manufacturer brands, organisations covered by the report include 24TMS, CTBC Bank, DBS, MAPFRE Asistencia, South China Insurance, Taishin Bank, Taiwan Acceptance Corporation, Tokio Marine Newa Insurance, Union Insurance and Yuanta Bank. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Taiwan.

Table Of Contents

Consumer Automotive Financial Services in Taiwan
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 Taiwan 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 6
Operating models 7
Tied and non-tied providers 7
Abbreviations 7
Exchange rate 8
PartnerBASE and market data annexe 8
Finaccord 8
2.0 MARKET ANALYSIS 10
Introduction 10
Passenger vehicle data 11
Sales of new cars easily outpaced used car sales between 2009 and 2013 11
Toyota is the leading manufacturer group accounting for 30% of new cars sold in 2013 13
Consumer automotive finance and leasing market 14
Market size and growth 14
The volume of contracts organised at the point of sale more than doubled between 2009 and 2013... 14
... with similar growth apparent when this market is measured in value terms 15
Types of finance and leasing product 17
More than 95% of point-of-sale finance in Taiwan is due to one type of finance product 17
Consumer automotive insurance, warranty and assistance markets 18
Market sizes 18
In total, the automotive trade is likely to have sold contracts worth nearly TWD 20 billion in 2013 18
Survey of automotive dealers and manufacturer brands - overview 21
Introduction 21
Provision of consumer automotive financial services 22
Automotive dealers distribute five of the seven automotive financial services investigated... 22
... with the provision rate for extended warranties having increased substantially 22
Number and nature of dealer schemes 24
Dealers typically work with three or four providers of motor insurance 24
Types of motor insurance policy sold by dealers 26
Various types of policy can be purchased from dealers selling motor insurance 26
Sources of road assistance distributed by dealers 27
Generally, road assistance is provided automatically to buyers of new cars in Taiwan 27
Consumer uptake of automotive financial services through dealers 28
Point-of-sale take-up rates are very high for motor insurance among both new and used car buyers 28
Survey of automotive dealers and manufacturer brands - partnerships 30
Introduction 30
Finance and leasing 31
More than a half of the dealers researched utilise non-tied partners to one extent or another... 31
... with Taishin Bank favoured most in this respect 31
Most manufacturer brands have an arrangement for the provision of finance and leasing services 33
Ho Ruen is owned jointly by Hotai and Toyota Financial Services 33
The implied combined market share of the leading three providers falls just short of 50% 35
Motor insurance 36
Cathay Century Insurance and South China Insurance are the most frequently used non-tied providers... .. 36
... in a market visibly populated by ten non-tied underwriters 36
Competition among motor insurers for manufacturer brand partnerships is fierce... 38
... as evidenced by the fact that most brands co-operate with multiple partners 38
Extended warranties 40
A significant proportion of Taiwanese dealers are now offering extended warranties... 40
... even though not that many manufacturer brands have launched their own schemes 41
Apart from dealers' own schemes, one (international) external provider is active in this field 43
Road assistance 44
Road assistance is available through the vast majority of dealers in one form or another... 44
... with 24TMS clearly the dominant provider in this sphere 46
Prepaid service contracts 48
Prepaid service contracts are on offer from around a fifth of dealers in Taiwan... 48

List of Graphics / Tables


0.0 EXECUTIVE SUMMARY 1
Key market data for consumer automotive financial services in Taiwan, 2013 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS 10
Passenger car parc and new / used passenger car sales in Taiwan, 2009 to 2013 11
Passenger car parc and new / used passenger car sales in Taiwan, 2009 to 2013 (table) 12
New car registrations in Taiwan, segmented by manufacturer group, 2013 13
New and used passenger car finance market in Taiwan, segmented by distribution channel: volumes,
2009 to 2013 14
New and used passenger car finance market in Taiwan, segmented by distribution channel: values, 2009
to 2013 15
New and used passenger car finance market in Taiwan, segmented by distribution channel: values and
volumes, 2009 to 2013 (table) 16
% split between the different types of finance and leasing contract organised at the point of sale in Taiwan,
2014 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets
in Taiwan, 2013 19
Total revenues from consumer automotive insurance, warranty assistance and service contracts in
Taiwan, 2013 (table) 20
Comparison of the provision of each type of automotive financial service by dealers and manufacturer
brands in Taiwan, 2014 23
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial
service in Taiwan, 2014 24
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial
service in Taiwan, 2014 (table) 25
% split between the different types of motor insurance policy sold at the point of sale in Taiwan, 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 Taiwan, 2014 27
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale
in Taiwan, 2014 29
Provision of finance and leasing by dealers in Taiwan, 2014: provision rate, product sources and provider
share of non-tied partnerships 32
Provision of finance and leasing by manufacturer brands in Taiwan, 2014: provision rate, operating
models and weighted provider share of partnerships 34
Implied market shares of new business for finance and leasing in Taiwan, 2014 35
Provision of motor insurance by dealers in Taiwan, 2014: provision rate, product sources and provider
share of non-tied partnerships 37
Provision of motor insurance by manufacturer brands in Taiwan, 2014: provision rate, operating models
and weighted provider share of partnerships 39
Provision of extended warranties by dealers in Taiwan, 2014: provision rate and product sources .. 40
Provision of extended warranties by manufacturer brands in Taiwan, 2014: provision rate, operating
models and weighted provider share of partnerships 42
Implied market shares of new business for extended warranties in Taiwan, 2014 43
Provision of road assistance by dealers in Taiwan, 2014: provision rate, product sources and provider
share of non-tied partnerships 45
Provision of road assistance by manufacturer brands in Taiwan, 2014: provision rate, operating models
and weighted provider share of partnerships 47
Provision of prepaid service contracts by dealers in Taiwan, 2014: provision rate and product sources ... 48
Provision of prepaid service contracts by manufacturer brands in Taiwan, 2014: provision rate, operating
models and weighted provider share of partnerships 49

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