Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
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- Figure 1: New and used car sales, 2006-16
- Car sales suffer during recent recession
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- Figure 2: Price of fuel, January 2009-May 2011
- Companies
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- Figure 3: Number of UK franchised dealer outlets, 2000-10
- Retail landscape continuing to evolve
- Smaller cars and smaller brands proving popular with buyers
- Advertising support by dealers remains small
- The consumer
- Importance of used cars among consumers illustrates cost issues
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- Figure 4: Source of purchase of next car, 2008 and 2011
- Consumers are more aware of the need to price compare online
- Car finance gets the thumbs down
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- Figure 5: Attitudes towards dealerships, 2008 and 2011
- Consumer attitudes towards purchasing a car vary
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- Figure 6: Perceptions of car buying, 2008 and 2011
- What we think
Issues in the Market
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- What impact have the recent recession and rising motoring costs had on car purchasing?
- How are dealers performing?
- How is car retailing changing?
- How big is the role of the internet?
- How do consumers currently feel about their prospects of buying a car?
Future Opportunities
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- Experience is All
- Why Buy
Internal Market Environment
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- Key points
- Expenditure on cars falls back since recession
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- Figure 7: New and used car sales, at current prices, 2006-11
- Costs of motoring continue to increase
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- Figure 8: Consumer expenditure on car servicing and repair and motoring expenses, at current prices, 2006-11
- Price of fuel reaching a new high
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- Figure 9: Escalation of price of motor fuel in the recent years, January 2009-May 2011
- Running costs continue to mount for drivers
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- Figure 10: Motoring costs for petrol and diesel cars, 2011
- Used car buyers pay more
- Long car replacement cycles are a feature of the retail market
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- Figure 11: When current car was obtained, 2010
- Growth of the internet as a sales channel
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- Figure 12: Internet and other distance automotive sales (units), 2009 and 2010
- Support for AFVs set to impact on types of vehicles being sold
Broader Market Environment
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- Key points
- Recent slowdown for UK economy is set to be followed by rebound...
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- Figure 13: Trends in personal disposable income and consumer expenditure, 2006-16
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- Figure 14: GDP quarterly percentage change, Q1 2004-Q1 2011
- ...although the future for retail sales suggests something different
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- Figure 15: UK retail sales year-on-year growth, BRC vs. ONS, 2010-11
- Rise in multiple car ownership slows...
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- Figure 16: Number of cars owned by households, 1985/86-2008
- ...with evidence that household car ownership has stagnated
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- Figure 17: Number of cars per household and cars per adult aged 17+, 1985/86-2008
- Mixed opportunities for car sector from population changes
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- Figure 18: Trends in the age structure of the UK population, 2006-16
- Increasing affluence should stimulate trading up
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- Figure 19: Forecast adult population trends, by socio-economic group, 2006-16
- Smaller households should drive interest in smaller cars
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- Figure 20: Number of households and persons per household, 2000-31
- Women and the over-70s are getting more mobile
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- Figure 21: Full driving licence holders, by age and gender, 2002-09
Who’s Innovating?
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- Key points
- Buying online
- Car supermarkets strengthen their presence in the market
- Manufacturers and retailers move into social media...
- ...with an increasing number also going green
Competitive Context
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- Key points
- Cars are a major item of expenditure
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- Figure 22: Consumer expenditure, by sector, 2011
- Food expenditure leads in terms of expenditure increases
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- Figure 23: Consumer expenditure (current prices), by major category, 2006 and 2011
- New car sales perform better than commercial vehicle sales during the recent recession
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- Figure 24: New car vs. truck and commercial vehicle new registrations, 2005-10
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Market Size and Forecast
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- Key points
- New car market shows little evidence of recovery
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- Figure 25: Total new car registrations, by private, fleet and business sales, 2006-11
- Initial boost to new car sales by SIS falls away as scheme is removed
- Fall in 2011 sales reveals the true state of car retailing
- Private buyers remain the stumbling block
- Used car sales appear more promising
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- Figure 26: Sales of used cars, by volume, 2006-11
- Used volumes appear more promising
- The future
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- Figure 27: Sales of new and used cars, by volume, 2006-16
- Forecast
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- Figure 28: Best- and worst-case forecasts of new car registrations (volume), 2006-16
- Figure 29: Best- and worst-case forecasts of used car sales (volume), 2006-16
Makes and Models and Dealership Numbers
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- Key points
- Smaller vehicles benefit from strongest demand
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- Figure 30: Sales of new vehicles, by vehicle type, 2006-10
- Mini category sees strongest growth
- Larger and top-of-the-range models suffer from recession
- Purchasers turning away from big brands
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- Figure 31: Manufacturer shares of new car registrations, 2007-10
- British and French brands falling out of favour?
- Japanese brands also losing reputation
- In contrast, German brands are proving increasingly popular
- Growing interest in small brands is also evident
- Dealer distribution network in decline
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- Figure 32: Number of UK franchised dealer outlets, 2000-10
- Individual dealer fortunes vary
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- Figure 33: Ten largest UK franchised dealer networks, by brand and number of outlets, 2006-10
Companies and Outlets
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- Key points
- Big names dominate the dealer market
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- Figure 34: Top ten dealership groups in the UK*, 2010
- Supermarket sector dominated by major names
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- Figure 35: Leading car supermarket operators, 2010
- Consolidation remains a feature of the retail market
Retailer Profiles
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- Pendragon
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- Figure 36: Pendragon Group Plc, financial performance, 2006-10
- Inchcape
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- Figure 37: Inchcape UK, financial performance, 2006-10
- Jardine Motors Group
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- Figure 38: Jardine Motors Group UK Limited, financial performance, 2006-09
- Greenhous Group
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- Figure 39: Greenhous Group, financial performance, 2006-10
- Lookers
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- Figure 40: Lookers Plc, financial performance, 2006-10
- Sytner
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- Figure 41: Sytner Group, financial performance, 2006-09
- Vertu Motors
- Car supermarket operators
- Carcraft
- Cargiant
- Motorpoint
- Factory-owned dealer groups
- Mercedes-Benz Retail Group
- Ford Retail Group
- Renault Retail Group
- Robins & Day
- Other dealer groups
- Marshall Motor Group
- Listers Group
- JCT600
- Perrys Group
- Online sellers
- eBay Motors
Advertising and Promotion
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- Key points
- Promotional expenditure records a dip during recession
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- Figure 42: Main media advertising expenditure by car retailers, 2008-10
- Promotional expenditure remains a small share of overall sales
- Big players in the market record an increase in advertising support
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- Figure 43: Main media advertising expenditure by car retailers, top 20 companies, 2008-10
- Several dealers record a doubling of advertising expenditure between 2008 and 2010
- Radio and press advertising dominate retail communications
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- Figure 44: Main media advertising expenditure by car retailers, % share, by media type, 2008-10
- Radio and press advertising perform well as many other channels suffer from a fall in spend
Consumer – Car Ownership and Brand
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- Key points
- Majority of adults have access to a car
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- Figure 45: Car drivers, by type of ownership, June 2011
- Majority of car drivers have their own vehicle
- Young adults least likely to drive a car
- High earners are more likely to drive a new car
- Londoners are least likely to drive
- Age of car
- New cars are in the minority
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- Figure 46: Age of car driven, June 2011
- Nearly four fifths of drivers drive a vehicle over three years old
- Income again a factor when it comes to driving a new car
- Most popular brands
- Ford is the most popular brand currently on the road
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- Figure 47: Make of car owned, June 2011
- Mass-market brands dominate
Consumer – Car Purchase Behaviour
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- Key points
- Sizeable minority expect to change their car in the coming 12 months
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- Figure 48: Intention to buy a car in the next 12 months, 2008 and 2011
- Men and high earners opt to buy new
- Second-hand cars appeal to young adults
- Drivers of newer vehicles are more likely to purchase from new again
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- Figure 49: Car buying expectations, by age of car driven, June 2011
- Dealers are the most popular destination to purchase a vehicle
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- Figure 50: Car buying process for next car, June 2011
- Dealers are important but the way to them varies
- Online and trade magazines have an important role when not purchasing from a dealer...
- ...although online has less of a role in replacing a dealer
- Older drivers find greater favour with dealers...
- ...with young drivers looking at alternative sources of information
- Londoners are more likely to look at other channels for purchasing
- Wealthier individuals show greatest interest in dealerships
- New and used buyers opt for different purchase channels
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- Figure 51: Source of purchase of next car, by intention to buy new or used, June 2011
- Dealers dominate for those buying new
- Dealers less important for used cars with other channels more significant
The Consumer – Attitudes towards Dealerships and Car Buying
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- Key points
- Dealerships
- Costs are on the mind of many consumers when purchasing
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- Figure 52: Attitudes towards dealerships, June 2011
- Dealers generate differing views
- Costs are an issue for many
- Improvements highlighted by a small minority
- Men record greatest concerns when using dealers
- Dealers have strongest connection with older drivers
- High earners have mixed views on dealers
- Attitudes towards dealers vary with age of car
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- Figure 53: Attitudes towards dealerships, by age of current car, June 2011
- Drivers of new cars appear wedded to dealer benefits...
- ...with drivers of older cars more inclined to have negative views
- Those owning a car from new are also positive towards dealers
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- Figure 54: Attitudes towards dealerships, by type of car driven, June 2011
- Those who bought from new view dealers as offering a number of benefits
- Used driver views on dealers are more limited
- Mixed views from consumers towards car purchasing
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- Figure 55: Perceptions of car buying, June 2011
- Stark differences exist between buyer groups
- Internet offers consumer benefits
- Older buyers appear more confident and savvy
- Younger buyers opt for the internet for help
- Income breeds confidence
- Purchasers of new cars appear most confident
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- Figure 56: Perceptions of car buying, by car buying expectations, June 2011
- Interest in cars helps new buyers
- Used buyers may be hampered by financial concerns...
- ...with this also true of those who already drive a new car
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- Figure 57: Perceptions of car buying, by driver type, June 2011
Appendix – Competitive Context
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- Figure 58: New registrations – trucks, 2004-10
- Figure 59: New registrations – commercial vehicles, 2004-10
- Figure 60: Manufacturer shares in new truck registrations, 2008-10
- Figure 61: Manufacturers shares in new commercial vehicle registrations, 2009-10
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Appendix – Consumer – Car Ownership and Brand
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- Figure 62: Car drivers, by type of ownership, by demographics, June 2011
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- Figure 63: Age of car driven, by demographics, June 2011
- Most popular brands
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- Figure 64: Most popular make of car owned, by demographics, June 2011
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Appendix – Consumer – Car Purchase Behaviour
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- Figure 65: Car buying expectations, by demographics, June 2011
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Appendix – Consumer – Attitudes towards Car Purchasing
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- Figure 66: Most popular source of purchase of next car, by demographics, June 2011
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- Figure 67: Next most popular source of purchase of next car, by demographics, June 2011
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- Figure 68: Most popular attitudes towards dealerships, by demographics, June 2011
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- Figure 69: Next most popular attitudes towards dealerships, by demographics, June 2011
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- Figure 70: Most popular attitudes towards dealerships, by demographics, June 2011
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- Figure 71: Most popular perceptions of car buying, by demographics, June 2011
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- Figure 72: Next most popular perceptions of car buying, by demographics, June 2011
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