Arthur D. Little – Car manufacturers losing millions of Euros year on year to independent repair networks

One of the largest profit generators for car manufacturers remains parts and service. However, low-cost repair shop networks have increasingly become preferred suppliers to car insurers looking to keep costs down. Despite an increased push by automotive OEMs to bring their own label insurance products to market, the results so far have been disappointing. Despite cooperating with insurance companies and providing their own-labelled insurance products to their customers, OEMs across Europe’s key markets are still falling short of successfully penetrating cash buyers buying new or used-cars with their insurance products and are continuing to lose out on potential profit. “Captive Auto Insurances”, the latest study from global management consultancy Arthur D. Little, puts forward a lean yet comprehensive approach to increasing OEM insurance penetration based on its High Performance Business Model™ methodology and toolbox.  This includes:

  • Initial assessment of customer requirements
  • Quantitatively and qualitatively indentifying gaps between buyer needs and services provided by the insurance product
  • Re-designing product and pricing to better match the market requirements
  • Redefining product presentation and promotion
An in-depth analysis of the shortcomings of insurance products from OEM dealerships across Europe has led Arthur D. Little to develop this innovative approach to overcoming the insurance barrier. However, in order to achieve truly sustainable improvements, sales personnel must understand the insurance products and be comfortable enough to convincingly integrate them into the sales process. “Our study has shown that despite the potential profit to be had from insurance commissions, OEMs have consistently failed to route this business into their own shops,” comments Dr. Andreas Gissler, Director in Arthur D. Little’s Automotive & Manufacturing Group, Europe. “For example, it is clear that sales personnel need to better understand the long-term benefits of insurance products as well as their effect on customer loyalty.  Based upon our in-depth understanding of both the automotive and insurance sectors, we believe that the methodology we outline in this study can assist OEMs in tapping into this highly lucrative downstream business.”  “Captive Auto Insurances” is available to download at www.adl.com/Captive_Auto_Insurances

Notes for Editors

Founded in 1886, Arthur D. Little was the world’s first professional management consulting firm. Arthur D. Little is a global leader in management consultancy, linking strategy, innovation and technology with deep industry knowledge. These last years, Arthur D. Little developed partnerships with more than 70% of Fortune 100 companies. Its teams conceive and implement sustainable, innovative and operational solutions. Arthur D Little is present in over 20 countries with more than 1000 consultants. With its partners Altran Technologies, the firm has access to a network of over 17.000 professionals.

Further Information

Sue Glanville/Jo Gwaspari
Say Communications
Tel: +44(0)2089716400
arthurdlittle@saycomms.co.uk