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Consumer Automotive Financial Services in China

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 and LCVs to individuals

Rationale

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

This report offers a detailed updated analysis of the subject in China 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

Types of vehicle

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

Sales of new passenger car sales continue to boom...

... but the market for LCVs appears to be mature

Volkswagen leads a very fragmented market followed by Buick, Honda and Changan

Consumer automotive finance and leasing market

Market size and growth

The growth of point-of-sale finance in China has consigned direct finance to the periphery

The value of point-of-sale finance for used cars grew most rapidly between 2012 and 2016

Types of finance and leasing product

Simple loans dominate point-of-sale finance although alternative products seem to be gaining in importance

Consumer automotive insurance, warranty and assistance markets

Market sizes

In total, the automotive trade is likely to have sold contracts with a total value in excess of CNY 300 billion

Survey of automotive dealers and manufacturer brands - overview

Introduction

Provision of consumer automotive financial services

Product provision rates via dealers did not change greatly between 2014 and 2017

Number and nature of dealer schemes

The average number of finance providers used by dealers has risen substantially

Types of motor insurance policy sold by dealers

Most dealers sell comprehensive cover with disaggregated options also available

Sources of road assistance distributed by dealers

Road assistance is often included as a benefit with annual servicing

Consumer uptake of automotive financial services through dealers

Take-up rates for point-of-sale finance and leasing have surged for both new and used vehicles…

… albeit they remain below those for motor insurance

Survey of automotive dealers and manufacturer brands - partnerships

Introduction

Finance and leasing

Non-tied providers have enjoyed more frequent utilisation among dealers in recent years…

… with Ping An Bank and China Construction Bank benefiting the most from this trend…

... in a relatively fragmented market

Competition for manufacturer brand partnerships is also spread across numerous aspiring providers…

... with China Construction Bank again to the fore…

... followed by SAIC-GMAC Automotive Finance and ICBC

The top six competitors are likely to account for around a half of the total market

Motor insurance

Non-tied providers are also influential in the market for dealer-intermediated motor insurance…

... with PICC, CPIC and Ping An most prominent in this context

Anbang Insurance holds the highest share of manufacturer partnerships…

… as a result of exclusive relationships with five brands

The weighted share of other leading providers is diluted by the non-exclusive nature of their partnerships

Anbang Insurance slips to fifth position in the combined analysis

Extended warranties

Most dealers focus on non-tied extended warranty propositions that they have developed themselves…

... and most manufacturer brands report internal management of their extended warranty programs…

... albeit a number of specialist firms are known to be active in the market

Dealers’ own extended warranty schemes dominate the combined analysis

Road assistance

Most dealers make road assistance available from both tied and non-tied providers…

… although none appear to work directly with independent assistance firms

Allianz Global Assistance has built up a substantial portfolio of manufacturer brand partnerships…

… although there are several other aspiring partners in this sphere

Prepaid service contracts

A minority of dealers promote prepaid service contracts to their customers

 

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY

Key market data for consumer automotive financial services in China, 2016

1.0 INTRODUCTION

2.0 MARKET ANALYSIS

New and used passenger car and LCV sales in China, 2012 to 2016

New and used passenger car and LCV sales in China, 2012 to 2016 (table)

New passenger car registrations in China, segmented by manufacturer brand, 2016

New and used car and LCV finance market in China, segmented by distribution channel: volumes, 2012 to 2016

New and used passenger car and LCV finance market in China, segmented by distribution channel: values, 2012 to 2016

New and used passenger car and LCV finance market in China, segmented by distribution channel: values and volumes, 2012 to 2016 (table)

% split between the different types of finance and leasing contract organised at the point of sale in China, 2017

Total revenues from consumer automotive insurance, warranty, assistance and service contract markets in China, 2016

Total revenues from consumer automotive insurance, warranty, assistance and service contracts in China, 2016 (table)

Comparison of the provision of each type of automotive financial service by dealers and manufacturer brands in China, 2017

Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in China, 2017 (table)

Average number of tied and non-tied schemes organised by dealers for each type of automotive financial service in China, 2017

% split between the different types of motor insurance policy sold at the point of sale in China, 2017

% availability of road assistance through factory warranties, annual services, extended warranties, motor insurance, prepaid service contracts and as a stand-alone product in China, 2017

% of new and used vehicle purchasers acquiring each type of automotive financial service at the point of sale in China, 2017

Provision of finance and leasing by dealers in China, 2017: provision rate, product sources and provider share of non-tied partnerships

Provision of finance and leasing by manufacturer brands in China, 2017: 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 China, 2017

Provision of motor insurance by dealers in China, 2017: provision rate, product sources and provider share of non-tied partnerships

Provision of motor insurance by manufacturer brands in China, 2017: 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 China, 2017

Provision of extended warranties by manufacturer brands in China, 2017: provision rate, operating models and weighted provider share of partnerships

Implied market shares of new business for extended warranties at the point of sale in China, 2017

Provision of road assistance by dealers in China, 2017: provision rate and product sources

Provision of road assistance by manufacturer brands in China, 2017: provision rate, operating models and weighted provider share of partnerships

Provision of prepaid service contracts by dealers in China, 2017: provision rate and product sources

 

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