A Strategic Appraisal of Opportunities in Eastern European Automotive Finance Markets

Published by: Frost & Sullivan

Published: Jan. 17, 2005

Table of Contents

1. Executive Summary
   1. Introduction
      1. Market Overview
      2. Industry Structure
   2. Market Research Findings
      1. Total Eastern European Market for Automotive Finance
      2. Country Analysis and Distribution
      3. Strategic Recommendations

2. The Total Eastern European Automotive POS Finance Market
   1. Introduction
      1. Market Overview
      2. Definitions Assumptions and Methodology
   2. Market Drivers Restraints and Challeneges
      1. Market Drivers
      2. Market Restraints
      3. Market Challenges
   3. Market Engineering Measurements
      1. Market Size and Forecast of Cases and Total Advance
      2. Analysis by Eastern European Countries
      3. Analysis of Finance for New and Used Cars
      4. Analysis by Product Type
   4. Key Indicator Analysis
      1. Penetration
      2. Average Loan Amount
      3. Average Deposit
   5. Distribution
      1. Customer Purchasing Method
      2. Automotive POS Finance Market
   6. Automotive Finance Market Competition
      1. Market Participant Profiles: Leading Captives
      2. Market Participant Profiles: Leading Independent Finance Companies
   7. Strategic Recommendations
      1. Recommendations for New Entrants into the Eastern European POS finance market
      2. Recommendations for VM-Owned Finance Captives
      3. Recommendations for Independent Finance Companies
   8. Conclusions
      1. Strategic Conclusions:  Mapping the Future of Emerging POS Automotive finance markets
   9. Data Sheet: Eastern Europe
      1. Data Sheet : Total Eastern Europe

3. The Polish Automotive POS Finance Market
   1. Introduction
      1. Market Overview and Introduction
      2. Market Size and Forecast
      3. Key Market Trends
   2. New Car Finance
      1. Market Size
      2. Key Indicators
      3. Product
   3. Used Car Finance
      1. Market Size
      2. Key Indicators
      3. Product
   4. Distribution
      1. Preferred Customer Purchasing Method
      2. Point of Sale
   5. Automotive Finance Market Competition
      1. Market Share Analysis
   6. Data Sheet: Poland
      1. Data Sheet: Poland

4. The Czech Republic and the Slovak Republic Automotive POS Finance Market
   1. Introduction
      1. Market Overview and Introduction
      2. Market Size and Forecast
      3. Key Market Trends
   2. New Car Finance
      1. Market Size
      2. Key Indicators
      3. Product
   3. Used Car Finance
      1. Market Size
      2. Key Indicators
      3. Product
   4. Distribution
      1. Preferred Customer Purchasing Method
      2. Point of Sale
      3. Banks
   5. Automotive Finance Market Competition
      1. Market Share Analysis
   6. Data Sheet
      1. Data Sheet: The Czech Republic
      2. Data Sheet: The Slovak Republic

  5. The Hungarian Automotive POS Finance Market
     1. Introduction
      1. Market Overview and Introduction
      2. Market Size and Forecast
      3. Key Market Trends
   2. New Car Finance
      1. Market Size
      2. Key Indicators
      3. Product
   3. Used Car Finance
      1. Market Size
      2. Key Indicators
      3. Product
   4. Distribution
      1. Preferred Customer Purchasing Method
      2. Point of Sale
   5. Automotive Finance Market Competition
      1. Market Share Analysis
   6. Data Sheet: Hungary
      1. Data Sheet: Hungary

6. The Other Eastern European Automotive POS Finance Markets
   1. Slovenian Automotive POS Finance Market
      1. Introduction and Market Overview
      2. New Car Finance
      3. Used car finance
      4. Preferred Car Purchasing Method
      5. Point of Sale
      6. Data Sheet: Slovenia
   2. Romanian Automotive POS Finance Market
      1. Introduction and Market Overview
      2. New Car Finance
      3. Used Car Finance
      4. Preferred Car Purchasing Method
      5. Point of Sale
      6. Data Sheet: Romania
   3. Lithuanian Automotive POS Finance Market
      1. Introduction and Market Overview
      2. New Car Finance
      3. Used Car Finance
      4. Preferred Car Purchasing Method
      5. Point of Sale
      6. Data Sheet: Lithuania
   4. Latvian Automotive POS Finance Market
      1. Introduction and Market Overview
      2. New Car Finance
      3. Used Car finance
      4. Preferred Car Purchasing Method
      5. Point of Sale
      6. Data Sheet: Latvia
   5. Estonian Automotive POS Finance Market
      1. Introduction and Market Overview
      2. New Car Finance
      3. Used Car Finance
      4. Preferred Car Purchasing Method
      5. Point of Sale
      6. Data Sheet: Estonia

7. Frost & Sullivan Awards
   1. POS Finance Market Leadership Award
        1. 2005 Frost & Sullivan Award for Market Leadership
    2. POS Finance Market Penetration Leadership Award
         1. 2005 Frost & Sullivan Award for Market Penetration Leadership
    3. POS Finance Competitive Strategy Leadership Award
         1. 2005 Frost & Sullivan Competitive Strategy Leadership Award
     4. POS Finance Business Development Leadership Award
         1. 2005 Frost & Sullivan Award for Business Development Strategy Leadership

Abstract

Stricter EU Regulations with regard to Value-added Taxes on Car Purchases and Insurance Products Pose Strong Challenge

Recently introduced regulations on value-added tax (VAT) pose challenges to the growth of car sales and financing in the European Union (EU) and are causing a sharp decline in borrowing trends due to decreasing customer confidence. The primary challenge facing finance companies is to structure and provide alternative finance products, including insurance, to ease tax concerns. For instance, innovative promotions such as free gap insurance products and low and deferred monthly payment options are expected to alleviate customer concerns and boost confidence in borrowing. Dealers and educational advertising communicating the benefits of these products are expected to play important roles in steering the purchase decisions of customers.

This Frost & Sullivan research service analyses the eastern European automotive point-of-sale (POS) finance market in the following countries: Poland, Hungary, the Czech Republic, the Slovak Republic, Slovenia, Romania, Latvia, Lithuania and Estonia. The study provides valuable insights for companies looking to enter this market. It also encapsulates detailed strategic recommendations on market entry, products, product positioning, promotions and a comprehensive analysis of growth strategies adopted by leading market participants.

Joint Ventures, Partnerships and Wholly-owned Subsidiaries Set To Increase in Market

Competition in the eastern European automotive POS finance market is expected to intensify following extensive marketing efforts by finance companies including creative promotions, flexible financing and value-added products. While opportunities in this market are plentiful for new entrants, both foreign captives and independent finance companies need to understand the local market dynamics before increasing investments or starting subsidiary operations.

"Joint ventures (JV) and partnerships are anticipated to be suitable entry modes for foreign captives and independents in the short run, while in the long run, foreign entrants can either acquire or set up wholly-owned subsidiaries in eastern Europe," says the analyst of this research service. This will help them in expanding presence while ushering in new products and services to the market and realising critical economies of scale.

Buoyant Growth Projected for Eastern European Automotive Finance Market

"Despite the slump in vehicle sales and changes in the legislative and economic landscape in 2004, Frost & Sullivan anticipates buoyant growth in the eastern European POS finance market through the decade," says the analyst. "Total POS loans are expected to reach 1.6 million cases and total finance volume is anticipated to exceed 10.3 billion euros by 2011."

While independent finance companies currently dominate the market for both new and used cars, new captive entrants are gearing up to invest heavily in car promotions and are combining value-added services with finance products. This is likely to result in increased penetration and market share for captive companies. However, independent companies are expected to continue as aggressive competitors to captives mainly due to consolidations and good dealer relations in Eastern Europe.

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