New captive finance – Optimizing customer lifetime value
New captive
finance ¨C
Optimizing
customer lifetime
value
White paper
Munich, January 2016
Management summary
Major European car markets are forecast to experience only moderate
growth after the European crisis and remain extremely competitive
Offering finance products is a must to create additional sales momentum
and defend current market shares. In Germany, car sales are mainly driven
by corporate sales using leasing products
Providing finance products to customers also is a key means for OEMs to
maximize customer lifetime value systematically ¨C Most OEMs use their
own captive units once they've reached a critical size in total sales
In the past, the offering of finance products by OEMs has evolved from a
pure sales support function to the pursuit of profit contribution objectives
while following a characteristic path related to sales volumes
Recently, mature captive units increasingly shifted focus away from pure
sales support by broadening the product offering to mobility or retail banking
services with ultimate aim of maximizing customer lifetime value for OEM
Roland Berger has identified three strategic moves to successfully develop
captives and optimize the customer lifetime value
Roland Berger_White paper Automotive captive banking_FINAL.pptx
2
Contents
A. Current market overview
Page
4
B. Business model of automotive captives
15
C. Captive maturity stages
22
Roland Berger_White paper Automotive captive banking_FINAL.pptx
3
A. Current market
overview
Roland Berger_White paper Automotive captive banking_FINAL.pptx
4
Passenger car sales volumes have increased globally ¨C Especially
strong growth in China, but Europe has been stagnating recently
Passenger car sales per region [m]
+54%
-1%
16.4 17.1 16.3
16.1 16.2
11.6 12.6
13.6
16.2
17.9
China
+29%
15.9 17.3
Europe
19.2 20.2 20.5
¡¯10 ¡¯11 ¡¯12 ¡¯13 ¡¯14
Americas
¡¯10 ¡¯11 ¡¯12 ¡¯13 ¡¯14
Japan
+10%
¡¯10 ¡¯11 ¡¯12 ¡¯13 ¡¯14
+12%
4.2 3.5 4.5 4.5 4.7
¡¯10 ¡¯11 ¡¯12 ¡¯13 ¡¯14
10.8 11.3 11.7 11.5 12.0
Rest of World
¡¯10 ¡¯11 ¡¯12 ¡¯13 ¡¯14
Source: IHS Global Insight; Roland Berger
Roland Berger_White paper Automotive captive banking_FINAL.pptx
5
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