The extended warranty market in china by daxue consulting

TO ACCESS MORE INFORMATION ON THE EXTENDEDWARRANTY MARKET IN CHINA, PLEASE CONTACT DX@DAXUECONSULTING.COM
dx@daxueconsulting.com +86 (21) 5386 0380
September. 2019
HONG KONG | BEIJING | SHANGHAI
www.daxueconsulting.com
1
THE EXTENDED
WARRANTY MARKET IN
CHINA

© 2019 DAXUE CONSULTING
ALL RIGHTS RESERVED
Who we are
2
Covered Tier-1 cities
Covered Tier-2 cities
Covered Tier-3 (and below) cities
We are daxue consulting:
• A market research firm specializing on the Chinese
market since 2010
• With 3 offices in China: in Shanghai, Beijing and
Hong Kong
• Employing 20+ full-time consultants
• Full, complete, national coverage
• Efficient and reliable fieldwork execution across
China
• Using our expertise to draw precise, reliable
recommendations
• With key accounts from around the world
Your Market Research Company in China

ALL RIGHTS RESERVED
The strengths of Daxue Consulting
6 crucial competitive advantages
 Working on each project
making exchange and
challenges, recruiting the
brightest talents in both local &
international (1:1), to ensure
a comprehensive & scientific
logic thinking.
 Result-oriented, regular
reports with our clients to
make sure we align the
expected objective.
 Teams & proposal are tailor-
made depending on the
project.
 One client = one team.
 Using 50+ software
 Leveraging alternative data and
open source intelligence
 Social listening
 Our methodologies are rigorous
and serious, taking information from
the best practice in the world of
consulting and research.
 Demanding on the results, detail-
oriented, respectful towards our
commitments.
 Corporate presentation.
1. Localized & Creative 2. Responsive & Flexible
5. Innovative 6. Professional
 Daxue Consulting does not
outsource its services. Deep
understanding on the
fieldwork and the context
within which data was
collected.
 Transparency of sources and
information
3. All In-house Management
 We care about results and
design our research in order
to be operational.
 We are driven by metrics
such as customer acquisition
costs, business plan KPIs,
P&L optimization.
4. Actionable recommendations
3
Responsive
Manage
from A to Z
Actionable
recommen-
dations
Innovative
Professional
Rigorous
& creative

ALL RIGHTS RESERVED
Our services
4
MARKET RESEARCH MARKET STRATEGY
MARKET SIZING
USER EXPERIENCE
CONSUMER JOURNEY
SENSORY RESEARCH
MARKET ENTRY
OPEN INNOVATION
BRANDING STRATEGY
MARKET ACTIVATION

ALL RIGHTS RESERVED
350+ clients with 450+ projects for the past 7 years
Examples of references
5

ALL RIGHTS RESERVED
A recognized expertise on the Chinese market
Regularly featured and quoted in global publications
Daxue latest quotations in recent publications
6

ALL RIGHTS RESERVED
Using modern tools to stay ahead of the competition
A selection of tools leveraged by Daxue Consulting
Search engine &
E-commerce analytics
Social listening
Data mining/survey
analysis
Website/app traffic
comparison
Diary study &
Community research
7

ALL RIGHTS RESERVED
8
The large car market drives the
extended warranty market in China
Intensity of competitive rivalry in
China‟s EW market
Pain points and Incentives of China
EW market
1
2
3
Contents
09
24
38

ALL RIGHTS RESERVED
The large car market drives the extended
warranty market in China
9

ALL RIGHTS RESERVED
China is the largest vehicle market in the world
 Although 2018 marks the first year of declining vehicle sales
(not including second-hand vehicles), China is still the largest
vehicle market in the world.
 The high car sales boosts the development of the car insurance
and extended warranty market in China.
10
Source: China Association of Automobile Manufactures,
http://cv.ce.cn/zxz/zxzbwzg/201901/14/t20190114_31254856.shtml
http://www.chyxx.com/industry/201801/604283.html
13.60
16.00 16.80 17.60
21.10
23.49
24.60
28.03 28.88 28.08
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Vehicle sales in China
(million units–2009-2018)

ALL RIGHTS RESERVED
Second-hand car market growth in China (1/2)
11
10.399.2 12.40 13.82 9.92
2015 2016 2017 2018 2019.01-09
Sales of Second-hand vehicles in China
(million units-2015-2019)
 In 2018, second-hand car sales
rose with a 10.3% growth rate,
which can bring more business
opportunities for vehicle insurance
and extended warranty.
 Although the sales of second-hand
cars declined by 13.8% in the first
three quarters of 2019 due to the
automobile emission policy, many
second-hand cars still have no
after-sales guarantee system.
This creates a large potential for
the extended warranty market.
Source: http://www.cada.cn/Data/info_86_7048.html
http://auto.hx2car.com/article/1712803
https://bg.qianzhan.com/trends/detail/506/190128-7d6e3379.html
Million
units

ALL RIGHTS RESERVED
Second-hand car market growth in China (2/2)
Second-hand SUV sales growth outpaces the rest of the market.
12
Car Type Sales in 2018 (units) YoY growth
8,222,000 +11.56%Sedan
1,135,600 +30.83%
+8.09%
-12.20%
+9.48%
+10.18%1,467,800
1,222,800
310,950
781,900
Bus
Truck
Crossover vehicles
MPV
SUV
o Sedan: Also known as saloon, is a
passenger car in a three-box
configuration with separate
compartments for engine, passenger,
and cargo.
o MPV (multi purpose vehicle): Is a
large hatchback with seating for six
or more.
o Crossover vehicles: Vehicles with
SUV styling features that are based
on passenger car platforms and are
only intended for light off-road use.
 From the perspective of the overall second-hand vehicles sales mentioned above, the growth rate has gradually slowed down, which is largely
affected by the economic downturn in the second half of 2018.
 From the perspective of segment market, the multi-purpose functionality of SUV has been favored by domestic users in recent years, and SUV has
become the second largest sales point after Sedan. The number of domestic SUV has grown rapidly, driving the rapid growth of second-hand
vehicle SUV transactions. In 2018, the number of second-hand vehicle SUV transactions reached 1.156 million with 30.83% YoY growth rate.
 Because second-hand vehicles transactions are circulation of goods, frequency of turnover is key.
Source: http://www.cada.cn/Data/info_86_7048.html
http://auto.hx2car.com/article/1712803
https://bg.qianzhan.com/trends/detail/506/190128-7d6e3379.html

ALL RIGHTS RESERVED
The main purchase channels of second-hand vehicles
• Offline channels still dominate the second-hand vehicle sales in China, however online platforms have gradually been
accepted by consumers.
• 4s stores only occupied around 12% market share, since their relatively high price and less car models.
• 18-35 years olds are the main consumers of online second-hand car platforms (B2B, B2C and C2C).
13
Source: 2018 used car market analysis report
http://baijiahao.baidu.com/s?id=1604948169408737523&wfr=spider&for=pc
The main purchase channels of
second-hand vehicles in China (2018)
Private car dealers
4S stores
Online platforms (B2B, B2C and C2C)
Friends
Second-hand vehicle stores (offline)
Online second-hand car sales
by age (2018)
45-60 years old
36-45 years old
25-35 years old
18-25 years old
12% 20% 32% 36%12.0% 12.4% 14.6% 37.4%23.6%

ALL RIGHTS RESERVED
License Plate policy in China
14
Source: http://www.shanghai.gov.cn/shanghai/node22848/node22926/node22928/userobject21ai344584.html
https://zhidao.baidu.com/question/1756581614020354628.html
For vehicle owners For second-hand vehicle buyers
• According to the Regulations on the Registration of
Motor Vehicles ( 机动车登记规定 ) in China, all
vehicle license plates (except commercial trucks and
vans) should follow vehicle owners and license
plates and cannot be re-sold with the vehicle.
• However, license plates can be transferred to car
owners‟ immediate family members.
• After car owners sells their car, their license plates
will be recycled by local government, or the car
owner can apply to keep the license plate (depends
on the rules of different provinces).
• For second-hand vehicles buyers, they must
apply for new license plates after they
purchased second-hand vehicles.
• If a second-hand vehicle buyer purchases second-
hand cars in a different city, they will have a
temporary license plate and they need apply
official ones after they return their cities, usually
within 60 days depending on province.

ALL RIGHTS RESERVED
Vehicle original warranty in China (1/2)
15
Source:
https://baijiahao.baidu.com/s?id=1594886751939825578&wfr=spider&for=pc
https://baike.baidu.com/item/汽车保修期/
• A car warranty offsets the cost of repairing or
replacing certain parts of vehicles. It comes in
handy if consumers do not prepare to pay the cost
of those fixes.
• In China, vehicle manufacturers/brands provide
warranty services for up to 3 years or 60,000 km
to new vehicles based on the policy of automobile
warranty services of repair, replacement and refund.
• However, their warranty services only includes core
vehicle parts.
Warranty services only
focus on the core parts
of vehicles, such as:
• Engine System
• Vehicle gearbox
• Drive system
• Vehicle Chassis
Wearing parts (car parts other than core
parts) usually have shorter warranty period:
Air filter, Air conditioning filter, Motor oil filter,
Fuel filter, Clutch plate, Sparke plug, Brake
lining, Tier, Bulb, Battery, Fuse & Ordinary
relay (exclude integrated control unit), Remote
batter, Wiper blade, etc.

ALL RIGHTS RESERVED
Vehicle warranty in China (2/2)
16
Source: https://baike.baidu.com/item/汽车保修期/
01
02
For the vehicle consumers in China, there are 3 conditions that they can‟t
have warranty services from vehicle manufacturers when they purchased
new cars.
03
04
Consumers retrofitted their cars privately.
Almost all car manufacturers in China refuse to provide warranty
services to those cars that have been retrofitted.
Consumers don‟t follow the requirement of brands, when they maintain their
cars.
If consumers go to stores other than the 4s stores or maintenance stations
designated by car brands, then they won‟t have warranty service.
Damage of the car results from misuse.
If the damage of vehicles is from man-made reasons or traffic accidents,
car owners only can get payment from commercial motor insurance.

ALL RIGHTS RESERVED
Extended warranty (EW) in China
17
Source: Vango Data
The market size of second-hand vehicles EW
in China reached 3 billion RMB in 2017. The
market penetration of second-hand vehicle EW
in China was less than 10%.
.
Extended warranty is a service that continues to
protect consumers‟ vehicles after factory warranty
ends, it provides similar coverage beyond those time
or mileage limits.
.
Extended warranty covers mainstream vehicle
types: Sedan, SUV, MPV, Crossover vehicles,
etc.
.
Extended warranty in China is usually divided into 2
types:
• EW for the whole vehicle.
• EW for any single vehicle part, the Chinese EW
suppliers provide EW services by different car
parts, mainly include engine system, vehicle
gearbox, driven system, exhaust system,
cooling system, steering system, electronic
control fuel injection system, braking system, air
conditioner, electric system and vehicle body.
The time period of EW services are from 1
year (minimum we found from PICC) to 8
years (maximum we found from Vango).
.

ALL RIGHTS RESERVED
What is the difference between "car extended warranty" and "car insurance"?
18
Source: http://www.sohu.com/a/243620603_792304
https://baijiahao.baidu.com/s?id=1594886751939825578&wfr=spider&for=pc
For car insurance Car extended warranty
• Car insurance focuses on car damages and
injuries of drivers and passengers from
external causes, such as traffic accidents, theft,
flood, and fires.
• Insurance companies pay the fee of car repair
or medical treatment from car accidents, after
consumers purchased their products.
• Vehicle extended warranty is for automobile fault
from no-external reasons or quality problems,
such as engine failure.
• The EW providers give free services of
replacing/fixing car parts after consumers
purchased EW products.

ALL RIGHTS RESERVED
How EW suppliers decide price - Take Zhongqiguohui (中汽国汇 ) as an example
In China, the price of EW products are mainly decided by the conditions of consumers‟ vehicles.
19
Vehicle model
Vehicle
mileage
Personal info
(phone number,
name, etc.)
Body style of
vehicle
The date of
purchase
License plate
number
EW suppliers in
China decide the
price of their
products by several
points
Vehicle brand
Location of
vehicle
registration
Date of
purchase

ALL RIGHTS RESERVED
Advertisements on EW (1/2)
 Advertisements usually highlight the terms of EW offers (years and km) and price.
 In addition to EW companies (third-party EW providers) and insurance companies, many car brands also offer extended warranty
services to make their cars more competitive and increase the sales rate.
20Source: http://dealer.xcar.com.cn/3240/market_7043525.htm Source: https://mp.weixin.qq.com/s/Rpe39mcDNwK8oh97wHgYGw
• EW offers 8 years/180,000 km service
with free car parts.
• EW product covers engine system,
braking system, gearbox and the whole
vehicle.
• EW product for HONOR (欧诺) and
Oulove (欧力威)
• Both belong to CHANGAN AUTOMOBILE
(长安汽车).
• The EW product extends the original
warranty (3 years/60,000 km) to 5
years/100,000 km, totally price is 1,368
RMB.

ALL RIGHTS RESERVED
Advertisements on EW (2/2)
21
Source: https://www.autohome.com.cn/market/201608/100058964.html
Source: http://yingkou.17.com/zixun/41064.html
EW offers from SAIC Motor & MAXUS for
its own vehicle models : V80 and G10
• 1-year EW needs 1,799 RMB, it extends
original warranty (original warranty is 3
years/60,000 km) to 4 years/80,000 km.
• 2 years EW needs 3,099 RMB, it extends
original warranty (original warranty is 3
years/60,000 km) to 5 years/100,000 km.
EW service of
BMW
• EW of 4-7 years
and no limit for
distance
• EW offers the
same service
with original
warranty

ALL RIGHTS RESERVED
22
Consumers’ opinions on Zhihu (1/2)
Source: https://www.zhihu.com
On Zhihu, the most common opinions about extended warranty consist of the following:
• Some EW products have many limits, for instance, consumers must go to places (such as 4s stores) designated by EW suppliers for vehicle
maintenance. Consumers believe those limits bring bad consumption experience.
• Consumers think EW products are not suitable for some situations, such as they plan to switch cars in 2-3 years, some car parts are not easy to
damage, etc.
Zhihu
Zhihu is the first Q&A website in China and has transitioned to a social media sharing platform gathering more than 100 million answers on various topics. The
platform is especially relevant to reach higher-, well-educated social classes
1. Consumers think the quality of EW products is not
very high. EW products are just the additional services of
vehicle sales, they are the way of making consumers to
designated places to maintain their cars.
2. Some EW products have purchasing limits, such as
consumers must buy the EW product before the ending
(3 months) of original warranty.
3. Consumers worry that vehicles won‟t need services
after they purchased EW products.
1. Vehicle owners need to consider how long they
plan to drive their vehicles. If less than 3 years,
then they don‟t need EW.
2. Small vehicles may not need EW, since
consumers usually switch them around 2 years.
Luxury cars need EW because they have high
maintenance costs
3. Some parts of vehicles have high maintenance
costs, so it is better to buy EW products for them.
Q: Why EW is not very popular in China?
A:
Q:
A:
How to pick a suitable EW product?

ALL RIGHTS RESERVED
23
Consumers’ opinions on Zhihu (2/2)
Source: https://www.zhihu.com
On Zhihu, the most common opinions about extended warranty consist of the following:
• It is important to pay attention to the terms in EW contract, especially the disclaimers;
• EW is more recommended for luxury cars and original EW for whole car could be the best choice for car owners.
Zhihu
Zhihu is the first Q&A website in China and has transitioned to a social media sharing platform gathering more than 100 million answers on various topics. The
platform is especially relevant to reach higher-, well-educated social classes
It depends on the detail terms in the contract, which declare the
cover and disclaimer. EW offered by 4s store might be 1) EW
supported by car manufacture, car owners can offer application
to 4s stores around the nation; 2) cooperated with third-party
company (like an insurance company), car owners need to
apply for the third-party company and only this 4s store can
offer maintenance; 3) independent contract provided by 4s
store itself, and the 4s store will cover the maintenance.
It is necessary for luxury cars because of its high
maintenance fee. Also, the maintenance ratio is not that low,
please don‟t think that luxury brands always have higher
quality.
If you want to buy EW, the recommended purchase order is:
Original EW for whole car -> Original EW for core parts ->
Non-original EW for whole car -> Non-original EW for core
parts. If you only pick non-original EW, then the order is:
International company‟s products -> Local products -> Third
party company‟s products -> other products
Q: Is there any differences between the EW offered by
car manufacture and 4S store? I found that BMW’s
EW offer in Tmall store costs 5988 RMB for 2 years
duration, while the offers in 4s store only costs
3600RMB.
Q: Is it necessary to buy EW?
A: A:

ALL RIGHTS RESERVED
Intensity of competitive rivalry in China‟s EW
market
24

ALL RIGHTS RESERVED
Companies providing EW services
Ping An 中国平安 PICC 中国人民保险
Vango
万高
Zhongqiguohui
中汽国汇
Autocare 信原
Lizhen 利真
Local Chinese Players International Players
The Warranty Group China
美延保修
Allianze
安联保险
Mapfre Group
曼弗雷 AMC安质中国
25

ALL RIGHTS RESERVED
Zhongqiguohui - 中汽国汇
Source: http://www.zhongqiguohui.com.cn/index.html
Business Model EW Package Provided
Partnership
• Up-stream cooperation: Insurance companies including PICC
and Ping An, which provide insurance coverage back-up for
Zhongqiguohui
• Down-stream cooperation: 4s stores around the nation, which
can help with product promotion and provide direct maintenance
and payment
Core business
• Customized EW services, Road rescue, Risk control consulting
Advantages
• In-time reaction, intelligent detection system, wide cover of
cooperation with 4s stores
Value proposition
• User experience
Lasting time
• 8 years / 200,000 kilometers (including original warranty)
Service options
• Basic service: Covers 2 basic systems (Engine system,
Gearbox system)
• Selective service: Covers 6 core systems (Engine system,
Gearbox system, Transmission system, Brake System,
Fuel system, Electrical system)
• Premium service: Covers all 12 systems (Engine system,
Steering system, Suspension system, Brake system,
Gearbox system, Transfer case, Axle and drive system,
Fuel supply system, Cooling system, electronic system, air
conditioner system, Subsidiary system)
26

ALL RIGHTS RESERVED
Zhongqiguohui’s WeChat account
Offer online purchase service for EW various payment methods
1 2 3
Fill out the vehicle information and
get the valuation
Submit the order and complete the payment
(support various methods includes WeChat,
AliPay, UnionPay, ApplePay, etc.)
Upload the picture of ID
card, driving license,
odometer and the car
Source: https://mp.weixin.qq.com/s/p1qDfTv5HJtGf9A23DUBJw
Chinese consumers have relatively little knowledge about EW. Therefore, ZQGH specially launched a WeChat public account to
provide consumers with EW knowledge. It introduces a series of issues that may make consumers encounter. Hence, it greatly
improves the operability of EW and educates consumers about EW, which gives it a competitive edge.
27

ALL RIGHTS RESERVED
Estimated price offered by Zhongqiguohui
Brand Audi
Model A4L 35 TFSI
Style Automatic sports
Time of
registration
June 4, 2016
Driving distance 10 km
Time limit for
the original
warranty
2 years
Service type Selective service
(includes 6 core
systems)
EW duration 1 year
Price 3,078 RMB
Source: https://mp.weixin.qq.com/s/p1qDfTv5HJtGf9A23DUBJw
EW information of Audi A4L 35 TFSI
28

ALL RIGHTS RESERVED
PICC – 中国人民保险
Source: http://www.epicc.com.cn/chexian/caryanchangbaoxiu/#/main
Partnership
• Strategic cooperation with car brands: Provides EW to all
new cars under Brand and used cars with official
authorization
• Strategic cooperation with 4s store and repair shop: Provides
product promotion, direct maintenance and cover insurance
payment
Core business
• EW services, Road rescue
Advantages
• High cost-effective, flexible transferred warranty, wide
network around the nation
Value proposition
• User experience
Lasting time
• 1-3 years (on the top of the original warranty)
Service options
• Comprehensive approach: Provides guarantee for engine,
gearbox system, control unit in engine transmission, fuel
system, intake/exhaust system
• Original warranty: The whole car excluded consumable
items listed by regulation
29

ALL RIGHTS RESERVED
PICC’s EW product
Save money
Less effort
Maintain value
Free from worry
• EW service of PICC can be easily purchased
via mobile phone, which is a one-stop service.
• EW service can be transferred from a car
owner to another, it may increase the possibility
of trading volume.
EW product features EW planning
• PICC only offers 2 kinds of EW service, compared with
some third-party EW suppliers, the company has less
extension (time and km), but its main sales points are
relatively low price, fast claims and transferable EW
contract.
Comprehensive EW service Original factory EW service
Source:http://www.epicc.com.cn/chexian/caryanchangbaoxiu/#/main
http://www.zhongqiguohui.com.cn/product-3.html#erweima
Claims process
30

ALL RIGHTS RESERVED
PICC’s WeChat account
Online service + store, and market communication
Different sections in PICC’s WeChat account
WeChat store
Case report
Picture upload
Payment process
Service table
Online service
Road rescue
Life of car owner
Latest benefit
WeChat shop
Insurance store
• The WeChat account of PICC is developed to:
1) Promote user satisfaction by offering online support and in-time reaction
2) Convenient access to buy and check insurance
3) Provide latest benefit and daily activities to improve user experience
• About 99% of users shows they would subscribe the WeChat official
account and the average of each article reach at about 37,956 people.
• In PICC‟s WeChat store, there are three types of services are
provided: Buy insurance, give as gifts and claim online
• In “family” section, car insurance is ranked fourth. If the list is
organized by popularity, it might show that more Chinese family
members care about EW and tend to buy car insurance online
Buy
insurance
Give as
gifts
Claim
online
Online store in WeChat
Vehicle extended
warranty insurance
Claims service
31

ALL RIGHTS RESERVED
PICC APP: More services provided than WeChat
APP interface Online store in APP
• Property and car insurance are listed as separate section in APP
• In the car insurance section, the EW service is listed
• The purchase process looks quite similar with that of finance products
• The total displayed ratings shows most people have good user experience
about APP
The PICC APP adopts universal integrated financial service, like
Insurance keeper, car insurance quotation, online insurance
payment, but still includes online store. Besides, the „Driving‟
service will record entire driving behavior and provide a
performance score, the higher score means the higher points
award, and this points can be exchanged for service.
71.48%
3.93%
3.75%
2.68%
18.15%
Total Displayed ratings of PICC APP on appannie
(about 540 thousand users)
5 stars 4 stars 3 stars 2 stars 1 star
Source:https://www.appannie.com/account/login/?next=/d
ashboard/home/
Vehicle extended warranty
insurance
32

ALL RIGHTS RESERVED
Mapfre assistance - 路华救援
Mapfre‟s wholly-owned subsidiaries in China
Source: http://www.roadchina.com.cn/cn/service/kg6mh.html;
https://www.mapfre.com/corporate/about-mapfre/business-model/
MAPFRE aspires to lead in all markets where it operates,
harnessing a proprietary and differentiated management model
founded on profitable growth, with clear and purposeful client
orientation that encompasses both individuals and businesses,
featuring a multichannel focus and unrivaled vocation for service.
Partnership
• Down-stream cooperation: Develops close relationships with
global automakers like Renault and dealerships to promote
brand value worldwide
Touchpoint
• Official site, offline store, email
Core business
• Road rescue, EW service, Travel rescue and other value-added
services
Lasting time
• 1-3 years (on top of original warranty)
Service coverage
• Free repair service using original parts
• Flexible service for different models, different brands, and
different driving regions
• Value-added service includes nationwide road rescue,
scooter, dealer information inquiry
33

ALL RIGHTS RESERVED
Mapfre’ s Highlight product
34
 Road rescue
 EW offers
 Travel rescue
 Product & Service
 Industry solutions
 News center
 About us
Mapfre provides info about:
• Mapfre has launched a product called Manford EW, which is designed to complement road rescue services and help car owners to eliminate car
troubles. Compared with the suddenness and uncertainty of road rescue services, the applicability of Manford EW is wider and the coverage is larger.
• After the owner paying a certain amount of money in advance, Mapfre will flexibly provide services according to individual characteristics such as
different car types, brands, and driving regions to ensure the relevance and effectiveness of the service.
• In a "pre-emptive" way to bear the maintenance costs that may occur in the future, unnecessary troubles and financial burdens can be avoided, which
makes Mapfre more competitive.

ALL RIGHTS RESERVED
Ping An – 中国平安
Only provide EW service
• Strategic cooperation with The Warranty Group: Ping An
introduced EW service jointly with The Warranty Group, but no
information about this cooperation can be found
Core business
• EW services, road rescue
Value proposition
• User experience
Touchpoints
• Offline store, official site, hotline, WeChat, mini-program, Weibo,
app, email
Lasting time
• 1 year/20,000 kilometers or 2 years/40,000 kilometers (on
top of original warranty)
Service options
• Basic package: Provides guarantee for Engine assembly,
Transmission case assembly, Precursor assembly and
Rear axle assembly
• Platinum package: Provides guarantee for the whole car
(compliance with China's manufacturing standards) exclude
parts didn‟t provided by original supplier.
Types of cars
• Mainstream models of 26 car brands in total (25
international and 1 local - Roewe 荣威)
35

ALL RIGHTS RESERVED
Ping An’s EW service
36
 Service Introduction
 Purchase example
 Service Guidelines
Ping An provides info about:
• According to industry estimates, the proportion of vehicles that have undergone maintenance in the third year is 45%. Hence, Ping An cooperated
with the Warranty Group and launched a vehicle EW service to gain more consumers. As long as car owners have not entered the extended warranty
period, they can apply for a refund. When owners sold their cars, they can transfer the extended warranty service with the cars, which is full of
humanity and flexibility.
• However, the fee of canceling contract halfway is very high (12% of the contract amount + 120 RMB management fee), and the transfer fee is 280
RMB, so it‟s very uneconomical to surrender the insurance halfway for Ping An‟s consumers.
Tiny branch of Ping An‟s whole insurance system
Source: Ping An official website
http://www.4008000000.com/cpbaoxian/official/yanchangbaoxiu/index.shtml

ALL RIGHTS RESERVED
Transfer issue of EW offer
Warranty Service Contract Terms from Ping An
 In China, the EW offer can be transferred along with the ownership of the car. However, it could be various in different
service providers.
 Generally, 2nd hand car owners can buy the EW as long as meet some specific requirements of service providers.
Your rights and obligations in this service contract can transferred directly from you to the new buyer within 15 days by paying transfer fee of 280
RMB. This service contract cannot be transferred to any entity engaged in the car selling of renting industry.
- How to transfer the service contract
- Requirements need to satisfy (simultaneously)
At least 1 month before the
end of the original warranty
1 2
More than 2,000 kilometers
remains (in the guaranteed
distance offered by the
original)
3
Non-operating vehicle with
authorization from China
mainland brands
37

ALL RIGHTS RESERVED
Incentives of China’s EW market
39
China has a large demand
for new cars and second-
hand cars. But many
second-hand cars in China
have no warranty services,
which drives the
development of EW.
Large car market in
China
The developed internet
and social network allow
EW suppliers to advertise
their products and engage
consumers more
effectively by mobile apps,
WeChat, and more.
Internet and social
network in China
The Chinese government
further opened the market
to international
companies. More foreign
companies can access
China‟s EW market with
less barriers.
Policy support

ALL RIGHTS RESERVED
Pain points of China’s EW market
40
Many Chinese
consumers/car owners are
unfamiliar with extended
warranty, some consumers
believe EW is just another
insurance.
The lack of publicity
There are currently limited
options for EW products
(time and km). Some EW
suppliers can‟t provide good
service experience.
EW products and services
are not perfect
In order to attract more
clients, many car brands
started to offer longer
original warranty services,
which cuts into EW business
opportunities.
More competitive
market

ALL RIGHTS RESERVED
STAY
UPDATED
ON CHINA
MARKET
INSIGHTS
To get weekly China
market insights,
follow our WeChat
account
https://www.linkedin.com/company/daxue-consulting
https://daxueconsulting.com/newsletter-2/
WeChat
LinkedIn
Newsletter
41

The extended warranty market in china by daxue consulting

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Semelhante a The extended warranty market in china by daxue consulting

Semelhante a The extended warranty market in china by daxue consulting (20)

Mais de Daxue Consulting

Mais de Daxue Consulting (20)

Último

Último (20)

The extended warranty market in china by daxue consulting