Extended Warranties for New and Used Cars in Emerging Global Markets

NEW YORK, April 26, 2012 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

http://www.reportlinker.com/p0845964/Extended-Warranties-for-New-and-Used-Cars-in-Emerging-Global-Markets.html#utm_source=prnewswire&utm_medium=pr&utm_campaign=Passenger_Car

Extended Warranties for New and Used Cars in Emerging Global Markets investigates the market for extended warranties linked to sales of new and used passenger cars to consumers in ten important global markets. In total, Finaccord has calculated that across all ten countries this sector was worth in the region of USD 615 million in 2011 in gross written premiums and other revenues. Based on a survey of 765 dealers in Argentina, Brazil, China, India, Indonesia, Mexico, South Africa, South Korea, Taiwan and Thailand plus an investigation typically covering between 30 and 40 automotive brands in each country, the study delivers unique insights into the market for extended warranties for passenger cars bought by consumers, with fully comparable and standardised market values split between new and used cars. In addition to this market data, the survey measures the propensity of dealers to work with independent extended warranty providers as well as those tied to manufacturer brands, it reports on customer take-up rates for extended warranties at the point of sale, it identifies the leading non-tied providers used at the point of sale, and it describes the partnerships in place between manufacturer brands and extended warranty providers. The report and the PartnerBASE™ that accompanies it may be used in one or more of the following ways: - understand the current size and future potential of the market for extended warranties in ten of the most important growth economies in the world; - appreciate how this opportunity breaks down between extended warranties for new and used cars; - benchmark the degree of competitive intensity recorded for distributing extended warranties through the point of sale, and see where dealers are most open to working with non-tied partners; - identify the foremost competitors in each country: have international companies such as Allianz, Assurant, AXA, MAPFRE and The Warranty Group established themselves in each market, or do national providers predominate? - evaluate the potential for establishing partnerships with manufacturers and importers for branded or endorsed extended warranty schemes across these ten key markets.

The value of the market across these ten countries was in the region of USD 615 million in 2011. 1

.with new car extended warranties accounting for three quarters of the total . 2

Dealers' provision rates range from below 5% to more than 95%. 3

The take-up rate for extended warranties exceeds 50% for used cars in South Africa 4

Many opportunities exist for external providers to form partnerships with dealers and manufacturer brands . 5

1.0 INTRODUCTION 6

What is this report about? . 6

The focus of the report is on extended warranties related to the sale of passenger cars to individuals 6

Rationale 6

The provision of financial services is essential to support both car sales and profitability. . 6

… with huge diversity in these services between countries and products…. 6

… which have yet to be explored in detail 6

Methodology 7

Dealer survey . 7

Manufacturer survey 7

Market data 10

Computation of market data is based on a complex set of assumptions and variables… . 10

External sources 10

Definitions 11

Extended warranties 11

Captive, internal and tied providers . 11

Abbreviations and exchange rates 12

PartnerBASE™ . 12

Finaccord . 12

2.0 OVERVIEW 14

Introduction 14

Passenger vehicle data 15

The passenger car parc of these ten countries grew by 60 million vehicles between 2007 and 2011 15

New car sales fell in Mexico and South Africa over the same time frame . 16

Brazil has the largest used car market. . 17

. while South Korea has the second-largest market for used cars sold through dealers 17

The number of passenger cars per person is lowest in India and highest in Mexico . 18

Toyota features in the 'top ten' in every country in this study . 19

Extended warranties . 21

Market size . 21

South Africa is the only country with a large market for used car extended warranties… 21

Survey results 22

…while the provision rate by dealers was at its highest in Mexico 22

The highest numbers of competitors were found in China and South Africa, for differing reasons . 22

Dealerships rely on manufacturer or importer extended warranty programs in most countries . 23

Take-up rates for new cars are highest in Brazil and for used cars in South Africa 25

Overall take-up rates are very low in east Asia 25

A majority of manufacturer brands provide extended warranties in just three countries out of ten 27

3.0 ARGENTINA 28

Introduction 28

Passenger vehicle data 29

New car sales showed strong, fresh gains after a brief period of decline. 29

.while both dealer-intermediated and private used car sales maintained steady growth as well . 29

European manufacturers make up most of the top ten brands in Argentina… . 31

…with Volkswagen continuing to lead the passenger car market . 31

Dealer partnerships . 33

Extended warranties are unavailable for used cars, and are seldom purchased for new ones . 33

Manufacturer brand partnerships 34

These are the exclusive domain of the manufacturer brands (or their importers). 34

Market size and segmentation 35

4.0 BRAZIL . 36

Introduction 36

Passenger vehicle data 37

The number of new passenger cars sold in Brazil is rising at more than 8% per annum. 37

.whilst the numerically significant used car market also remains positive . 37

Fiat, Volkswagen and Chevrolet each hold a large segment of the Brazilian market . 39

Dealer partnerships . 40

Around 40% of Brazilian dealers offer extended warranty schemes . 40

Manufacturer brand partnerships 40

Specialist provider The Warranty Group underwrites two brands' schemes 40

Market size and segmentation 42

5.0 CHINA . 44

Introduction 44

Passenger vehicle data 45

New passenger car sales have soared in recent years. 45

.while the market for used cars still has to catch up . 45

A large number of brands compete in China 46

Dealer partnerships . 47

Customers are more likely to take out extended warranties for used than for new cars 47

Manufacturer brand partnerships 49

In a majority of cases extended warranties are offered through internal provision . 49

Market size and segmentation 51

6.0 INDIA 52

Introduction 52

Passenger vehicle data 53

Sales of new passenger cars are rising at around 16% per year. . 53

.with this rapid growth being more than matched by the increase in used car sales 53

In India's concentrated market, Maruti Suzuki accounts for almost half of new car registrations 55

Dealer partnerships . 56

Virtually all extended warranty schemes are linked to manufacturers . 56

Manufacturer brand partnerships 58

Tata Motors' scheme involves a specialist warranty administrator 58

Market size and segmentation 59

7.0 INDONESIA 61

Introduction 61

Passenger vehicle data 62

New car sales have displayed very strong growth in recent years. . 62

.with used car sales only slightly behind . 62

Japan-based manufacturer brands account for over 90% of new car registrations. . 63

.with Toyota continuing to lead the passenger car market . 63

Dealer partnerships . 64

Only a couple of dealers offer extended warranties. 64

Manufacturer brand partnerships 64

. and only two manufacturer brands promote extended warranties in Indonesia 64

Market size and segmentation 66

8.0 MEXICO 68

Introduction 68

Passenger vehicle data 69

New car sales show a steep decline from which they have not yet recovered. 69

while used car sales through dealers are only just showing signs of life after a calamitous decade… 69

…as legal and illegal 'chocolate' cars imported from the US continue to have a dramatic effect on sales 69

Nissan continues to hold the top position among individual brands… 71

…while US-based manufacturers continue to struggle 71

Market shares overall remain fairly steady against declining sales . 71

Dealer partnerships . 72

Only one in ten new car owners buys an extended warranty at the point of sale . 72

Manufacturer brand partnerships 72

Almost all manufacturers provide extended warranties themselves . 72

Market size and segmentation 74

9.0 SOUTH AFRICA 76

Introduction 76

Passenger vehicle data 77

New car sales plunged from 2007 to 2009 then recovered strongly. 77

. while used car sales increased steadily 77

Premium German brands are strong sellers in South Africa, alongside Korean models . 79

Dealer partnerships . 80

SA Warranties leads, but multiple providers split the rest of this market between them 80

Manufacturer brand partnerships 82

Innovation Group's partnership with Toyota gives it a leading position . 82

Market size and segmentation 83

10.0 SOUTH KOREA 85

Introduction 85

Passenger vehicle data 86

The South Korean market for new car sales is still growing at a good pace… . 86

…while used car sales are increasing even faster . 86

Hyundai and Kia account for about four in five new car registrations 87

Dealer partnerships . 88

Only a minority of dealers was found to offer extended warranties . 88

Manufacturer brand partnerships 90

Long factory warranties mean that few manufacturers offer extended warranties . 90

Market size and segmentation 91

11.0 TAIWAN . 93

Introduction 93

Passenger vehicle data 94

New car sales bounced back after being hit during the global economic crisis… 94

…as did used car sales 94

Japanese brands manufactured in Taiwan dominate the market for new car registrations . 96

Dealer partnerships . 97

More than one in every five dealers are offering extended warranties 97

Manufacturer brand partnerships 98

Several manufacturer brands promote extended warranties in Taiwan 98

Market size and segmentation 99

12.0 THAILAND . 100

Introduction 100

Passenger vehicle data 101

New car sales have grown much faster than the overall car parc… . 101

…while used cars are still mostly sold outside the dealer channel 101

Toyota and Honda jointly account for more than 60% of the market in new car registrations 103

Dealer partnerships . 104

More than a third of dealers promote extended warranties . 104

Manufacturer brand partnerships 105

Manufacturers normally offer extended warranties on an internal basis . 105

Market size and segmentation 107

0.0 EXECUTIVE SUMMARY . 1Four countries made up more than 90% of the market for extended warranties by value, 2011 2Extended warranties sold with used cars dominated in two countries, 2011 . 3In India and Mexico, extended warranties were offered by the great majority of dealers with new cars, 2011 . 4Average take-up rates were a key driver of the total value of extended warranties for new and used cars, 2011 . 51.0 INTRODUCTION 6Dealers contacted by Finaccord, segmented by country and manufacturer group affiliation 8Manufacturer brands contacted by Finaccord 9Manufacturer brands contacted by Finaccord (contd.) 102.0 OVERVIEW 14Overview of the passenger car parc segmented by country, 2007 to 2011 . 15Overview of new passenger car sales segmented by country, 2006-2011 16Overview of used passenger car sales segmented by country, 2007-2011 . 17Passenger car density by country, 2007 and 2011 18Passenger car density by country, 2007 to 2011 (data) 19Presence of manufacturer brands in the 'top ten' by country, by new car registrations, 2010 20Approximate size of the market for extended warranties for new and used cars, 2011 21Comparison of % of dealers offering extended warranties at the point of sale, 2011 22Comparison of average number of providers used by dealers offering extended warranties at the point of sale, 2011 23Comparison of tied / non-tied operating models used by dealers offering extended warranties at the point of sale, 2011 24Comparison of tied / non-tied operating models used by dealers offering extended warranties at the point of sale, 2011 (data) . 24Comparison of average % of new and used car purchasers acquiring extended warranties at the point of sale, 2011 25Comparison of overall % of new and used car purchasers acquiring extended warranties at the point of sale, 2011 26Comparison of average and overall % of new and used car purchasers acquiring extended warranties at the point of sale, 2011 (data) . 26Comparison of % of manufacturers / importers with arrangements for branded extended warranties, 2011 273.0 ARGENTINA 28Passenger car parc and new / used passenger car sales in Argentina, 2007 to 2011 30Passenger car parc and new / used passenger car sales in Argentina, 2007 to 2011 (data) . 30New car registrations in Argentina, segmented by manufacturer brand, 2010 32Provision of extended warranties by dealers in Argentina, 2011: provision rate and product sources . 33Provision of extended warranties by manufacturer brands in Argentina, 2011: provision rate and operating models . 34Approximate size and segmentation of the market for extended warranties for new and used cars in Argentina, 2011 . 354.0 BRAZIL . 36Passenger car parc and new / used passenger car sales in Brazil, 2007 to 2011 . 37Passenger car parc and new / used passenger car sales in Brazil, 2007 to 2011 (data) 38New car registrations in Brazil, segmented by manufacturer brand, 2010 . 39Provision of extended warranties by dealers in Brazil, 2011: provision rate, product sources and provider share of non-tied partnerships . 41Provision of extended warranties by manufacturer brands in Brazil, 2011: provision rate, operating models and weighted provider share of partnerships . 42Approximate size and segmentation of the market for extended warranties for new and used cars in Brazil, 2011 . 435.0 CHINA . 44Passenger car parc and new / used passenger car sales in China, 2007 to 2011 45Passenger car parc and new / used passenger car sales in China, 2007 to 2011 (data) . 46New car registrations in China, segmented by manufacturer brand, 2010 . 47Provision of extended warranties by dealers in China, 2011: provision rate, product sources and provider share of non-tied partnerships . 48Provision of extended warranties by manufacturer brands in China, 2011: provision rate, operating models and weighted provider share of partnerships . 50Approximate size and segmentation of the market for extended warranties for new and used cars in China, 2011 . 516.0 INDIA 52Passenger car parc and new / used passenger car sales in India, 2007 to 2011 53Passenger car parc and new / used passenger car sales in India, 2007 to 2011 (data) . 54New car registrations in India, segmented by manufacturer brand, 2010 55Provision of extended warranties by dealers in India, 2011: provision rate, product sources and provider share of non-tied partnerships . 57Provision of extended warranties by manufacturer brands in India, 2011: provision rate, operating models and weighted provider share of partnerships . 59Approximate size and segmentation of the market for extended warranties for new and used cars in India, 2011 . 607.0 INDONESIA 61Passenger car parc and new / used passenger car sales in Indonesia, 2007 to 2011 62Passenger car parc and new / used passenger car sales in Indonesia, 2007 to 2011 (data) . 63New car registrations in Indonesia, segmented by manufacturer brand, 2010 64Provision of extended warranties by dealers in Indonesia, 2011: provision rate, product sources and provider share of non-tied partnerships 65Provision of extended warranties by manufacturer brands in Indonesia, 2011: provision rate, operating models and weighted provider share of partnerships 66Approximate size and segmentation of the market for extended warranties for new and used cars in Indonesia, 2011 . 678.0 MEXICO 68Passenger car parc and new / used passenger car sales in Mexico, 2007 to 2011 70Passenger car parc and new / used passenger car sales in Mexico, 2007 to 2011 (data) . 70New car registrations in Mexico, segmented by manufacturer brand, 2010 72Provision of extended warranties by dealers in Mexico, 2011: provision rate, product sources and provider share of non-tied partnerships . 73Provision of extended warranties by manufacturer brands in Mexico, 2011: provision rate, operating models and weighted provider share of partnerships 74Approximate size and segmentation of the market for extended warranties for new and used cars in Mexico, 2011 . 759.0 SOUTH AFRICA 76Passenger car parc and new / used passenger car sales in South Africa, 2007 to 2011 . 77Passenger car parc and new / used passenger car sales in South Africa, 2007 to 2011 (data) . 78New car registrations in South Africa, segmented by manufacturer brand, 2011 79Provision of extended warranties by dealers in South Africa, 2011: provision rate, product sources and provider share of non-tied partnerships 81Provision of extended warranties by manufacturer brands in South Africa, 2011: provision rate, operating models and weighted provider share of partnerships 83Approximate size and segmentation of the market for extended warranties for new and used cars in South Africa, 2011 8410.0 SOUTH KOREA 85Passenger car parc and new / used passenger car sales in South Korea, 2007 to 2011 . 86Passenger car parc and new / used passenger car sales in South Korea, 2007 to 2011 (data) 87New car registrations in South Korea, segmented by manufacturer brand, 2010 . 88Provision of extended warranties by dealers in South Korea, 2011: provision rate, product sources and provider share of non-tied partnerships 89Provision of extended warranties by manufacturer brands in South Korea, 2011: provision rate, operating models and weighted provider share of partnerships 91Approximate size and segmentation of the market for extended warranties for new and used cars in South Korea, 2011 . 9211.0 TAIWAN . 93Passenger car parc and new / used passenger car sales in Taiwan, 2007 to 2011 94Passenger car parc and new / used passenger car sales in Taiwan, 2007 to 2011 (data) . 95New car registrations in Taiwan, segmented by manufacturer brand, 2010 96Provision of extended warranties by dealers in Taiwan, 2011: provision rate and product sources . 97Provision of extended warranties by manufacturer brands in Taiwan, 2011: provision rate and operating models . 98Approximate size and segmentation of the market for extended warranties for new and used cars in Taiwan, 2011 . 9912.0 THAILAND . 100Passenger car parc and new / used passenger car sales in Thailand, 2007 to 2011 . 101Passenger car parc and new / used passenger car sales in Thailand, 2007 to 2011 (data) . 102New car registrations in Thailand, segmented by manufacturer brand, 2010 103Provision of extended warranties by dealers in Thailand, 2011: provision rate and product sources . 104Provision of extended warranties by manufacturer brands in Thailand, 2011: provision rate, operating models and weighted provider share of partnerships 106Approximate size and segmentation of the market for extended warranties for new and used cars in Thailand, 2011 . 107

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