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Consumer Automotive Financial Services in Thailand

  • September 2014
  • -
  • Finaccord
  • -
  • 45 pages

Consumer Automotive Financial Services in Thailand investigates the market for automotive financial services linked to sales of new and used passenger cars to individual buyers in Thailand. In addition to analysing the market for finance and leasing services, the study also covers motor insurance, road assistance, creditor insurance, extended warranties 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 Thailand 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, creditor insurance, 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 TBH 35.3 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 55 leading car dealerships as well as an analysis of the approach to consumer automotive financial services of 27 car manufacturer brands in Thailand. 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 Allianz Global Assistance, Bangkok Insurance, Bank of Ayudhya, Krung Thai Bank, MSIG Insurance, Siam Commercial Bank, Thanachart Bank, Thanachart Insurance, TISCO Bank and Viriyah. Together, the report and database will provide you with the definitive guide to current and future opportunities in consumer automotive financial services in Thailand.

Table Of Contents

Consumer Automotive Financial Services in Thailand
TABLE OF CONTENTS
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 Thailand 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
New car sales more than doubled between 2009 and 2013… . 11
…while used cars are still mostly sold outside the dealer channel 11
Honda displaced Toyota as Thailand's leading passenger car manufacturer in 2013 . 13
Consumer automotive finance and leasing market 14
Market size and growth 14
By volume, direct lending exceeds point-of-sale finance for used cars but not for new cars… 14
...and the total value of point-of-sale finance is vastly higher than that for direct lending . 15
Types of finance and leasing product .. 16
One finance product type makes up more than 90% of point-of-sale finance contracts .. 16
Consumer automotive insurance, warranty and assistance markets ... 17
Market sizes .. 17
In total, the automotive trade is likely to have sold contracts worth over TBH 35 billion in 2013 .. 17
Survey of automotive dealers and manufacturer brands - overview . 20
Introduction 20
Provision of consumer automotive financial services . 20
Automotive dealers distribute six of the seven automotive financial services investigated .. 20
Manufacturers register a higher provision rate than dealers in four product categories ... 20
Number and nature of dealer schemes ... 22
Dealers mainly work with three or more providers for both finance and leasing and motor insurance 22
Types of motor insurance policy sold by dealers 24
In the main, two types of cover can be purchased from dealers that sell motor insurance .. 24
Sources of road assistance distributed by dealers . 25
Road assistance is generally provided automatically to buyers of new cars in Thailand . 25
Consumer uptake of automotive financial services through dealers . 26
Take-up rates for motor insurance at the point of sale are high among both new and used car buyers... .. 26
... and have grown substantially for both point-of-sale finance and extended warranties 26
Survey of automotive dealers and manufacturer brands - partnerships ... 28
Introduction 28
Finance and leasing .. 28
Over two-thirds of dealers utilise tied partners as well as non-tied providers 28
Non-bank finance companies are marginalised by Thailand's largest banks ... 29
With the exception of one, all manufacturer brands provide finance and leasing services... ... 31
...and Bank of Ayudhya is the leading non-captive finance partner for these brands ... 31
The Thai market for finance and leasing is mainly controlled by the major banks 33
Creditor insurance . 33
Very few dealers have yet developed any interest in selling creditor insurance… ... 33
...although the product is usually available from manufacturer brands . 34
Motor insurance 34
Just over a half of dealers stick to manufacturer-branded motor insurance policies only . 34
Thanachart Insurance enjoys the largest weighted share of partnerships among manufacturer brands… 36
… although Viriyah's implied market share of new business is slightly higher .. 38
Extended warranties . 39
Dealer provision rates for extended warranties have grown hugely in recent years… . 39
… with over a half of all manufacturer brands now running a scheme in this arena . 39
Road assistance ... 41
Non-tied road assistance services are provided by the dealers themselves 41
Allianz Global Assistance has established several important partnerships with manufacturer brands 42
Prepaid service contracts . 44
Prepaid service contracts are on offer from very few dealers in Thailand... .. 44
...albeit the provision rate among manufacturer brands is noticeably higher 44

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY ... 1
Key market data for consumer automotive financial services in Thailand, 2013 2
1.0 INTRODUCTION 3
2.0 MARKET ANALYSIS ... 10
Passenger car parc and new / used passenger car sales in Thailand, 2009 to 2013 . 12
Passenger car parc and new / used passenger car sales in Thailand, 2009 to 2013 (table) .. 12
New car registrations in Thailand, segmented by manufacturer group, 2013 .. 13
New and used passenger car finance market in Thailand, segmented by distribution channel: volumes, 2009 to 2013 . 14
New and used passenger car finance market in Thailand, segmented by distribution channel: values, 2009 to 2013 . 15
New and used passenger car finance market in Thailand, 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 Thailand, 2014 .. 17
Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in Thailand, 2013 .. 18
Total revenues from consumer automotive insurance, warranty assistance and service contracts in Thailand, 2013 (table) .. 19
Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in Thailand, 2014 . 21
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Thailand, 2014 (table) . 22
Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in Thailand, 2014 . 23
% split between the different types of motor insurance policy sold at the point of sale in Thailand, 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 Thailand, 2014 ... 25
% of new and used car purchasers acquiring each type of automotive financial service at the point of sale in Thailand, 2014 .. 27
Provision of finance and leasing by dealers in Thailand, 2014: provision rate, product sources and provider share of non-tied partnerships .. 30
Provision of finance and leasing by manufacturer brands in Thailand, 2014: provision rate, operating models and weighted provider share of partnerships 32
Implied market shares of new business for finance and leasing in Thailand, 2014 . 33
Provision of creditor insurance by manufacturer brands in Thailand, 2014: provision rate and operating models .. 34
Provision of motor insurance by dealers in Thailand, 2014: provision rate, product sources and provider share of non-tied partnerships . 35
Provision of motor insurance by manufacturer brands in Thailand, 2014: provision rate, operating models and weighted provider share of partnerships . 37
Implied market shares of new business for motor insurance in Thailand, 2014 ... 38
Provision of extended warranties by dealers in Thailand, 2014: provision rate and product sources . 39
Provision of extended warranties by manufacturer brands in Thailand, 2014: provision rate, operating models and weighted provider share of partnerships 40
Provision of road assistance by dealers in Thailand, 2014: provision rate and product sources 41
Provision of road assistance by manufacturer brands in Thailand, 2014: provision rate, operating models and weighted provider share of partnerships . 43
Provision of prepaid service contracts by dealers in Thailand, 2014: provision rate and product sources . 44
Provision of prepaid service contracts by manufacturer brands in Thailand, 2014: provision rate, operating models and weighted provider share of partnerships 45

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