Future of Captives

The report

Future of Captives – What will be the core businesses for Automotive Captives in 2030? was published by Deloitte Global, and translated into Chinese by Deloitte China Auto Service Team. The Captives is known as the OEM-related (original equipment manufacturers) auto finance companies.  The report sheds light on the possible developments and core business in the Captive industry. Our goal is to support our readers and facilitate decision-making in times of great uncertainty, to enable Captives not only to survive, but to come out on top of the disruption lying ahead.

Viewpoints / key findings

• The unpredictable future. Increasing regulation, consumer shifting preference on vehicle ownership, digital technology, and the emergence of autonomous as well as electric vehicles bring great impact on the future direction of the Captive industry. The developments in Captives are most uncertain from today’s point of view.
• The transformation of profit pools and the value chain in the next decade
  • Business shifts to emerging markets. Captives will not only face new customer segments with different needs but also a new competitive environment.
  • A shift from indirect to direct sales models. Captives need to develop and adopt new digital sales channels resulting in an increasing number and intensity of customer interactions.
  • Captives’ product and service portfolio will evolve fundamentally up to 2030. The asset-based business will decline, while the demand for new services based offerings is expected to increase substantially.
  • Customer-centricity will become a key concern for Captive executives. Holistic and seamless customer experience throughout the whole mobility ecosystem becomes inevitable.
• Based on these findings, we have selected six of these top strategic fields of action for Captives' decision-makers:
  • Flexibilisation of core business. Captives will need to modify their existing core business. Direct sales and on-demand services will gradually replace the current fixed-term credit and leasing products.
  • Urban mobility solutions. Urbanization rates throughout the globe will further increase in 2030, putting more pressure on city authorities to develop efficient urban mobility ecosystems.
  • Multi-brand fleet management. Decreasing private ownership of vehicles based on leasing contracts as well as bans of personal driving in inner cities will fuel the demand for large fleets. The funding and management of this fleets becomes one of the key capabilities in the future to provide mobility services.
  • Captive payment services. The service-based business models, especially in connection with autonomous fleets, will significantly increase the required number of payment transactions. Own payment infrastructures can become a key competitive advantage for Captives and OEMs to secure the value creation in and around their vehicle platforms.
  • Operational excellence. Both existing and new core businesses will be under great pressure towards operational excellence due to the competitive environment. The ability to build and run highly scalable international operating platforms will become a key challenge in the future.
  • Data monetization. Service-based businesses in particular will generate large quantities of vehicle, mobility, and customer data. Captives need to find ways to generate and use this data while staying compliant with ever-increasing regulation.