Finaccord’s study titled Prepaid Service Contracts for New and Used Cars in the Asia-Pacific Region amalgamates comprehensive and in-depth research covering 12 countries in the Asia-Pacific region, namely China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
Based on a survey of 820 dealers in these countries and an investigation typically covering around 30 manufacturer brands in each territory (although as many as 76 in China), the study delivers unique insights into the market for prepaid service contracts for new and used cars and LCVs bought by consumers. Moreover, the research also generates data describing the value of the market for such contracts in each country. In addition to this market data, the survey results are also used to measure the extent to which automotive dealers and manufacturer brands actually organise and intermediate prepaid service contracts in each country, to calculate average customer take-up rates for prepaid service contracts at the point of sale, and to understand relationships between manufacturers or importers and external providers for branded or endorsed programs.
Key findings from the executive summary of the report include:
the market for prepaid service contracts for new and used cars and LCVs in the Asia-Pacific region is worth in the region of USD 2.45 billion with almost 90% of this value attributable to buyers of new vehicles and with Japan the largest market;
Finaccord’s research indicates that the prepaid service contract markets of specific countries have very different levels of development when measured as a percentage of the value of underlying sales of new and used vehicles to consumers through dealerships;
by this measure, and across new and used vehicles combined, revenues for prepaid service contracts were worth 1.36% of the value of car and LCV sales in the most developed market in 2017 in comparison to the regional weighted average of 0.26%;
overall, Finaccord’s research indicates that almost 30% of the regional market value is attributable to external providers, including schemes reportedly run by dealers themselves, and the rest to internally-managed programs (i.e. manufacturer brands or importers running their own schemes).
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Finaccord is a market research, publishing and consulting company specialising in insurance and other financial services. Finaccord is part of Aon Global Operations, Singapore Branch.