Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
- Retailers hit by sluggish UK economy
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- Figure 1: New car sales, 2007-17
- Figure 2: Used car sales, 2007-17
- Market factors
- Failure of UK economy to grow a major concern
- Internet fails to provide any quick fix
- Small and medium-sized vehicles dominate
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- Figure 3: Share of new vehicle sales, by vehicle type, 2011
- Companies, brands and innovation
- Mass-market brands in decline
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- Figure 4: Percentage point change in manufacturer market share, 2009-11
- Dealers focus on bigger sites
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- Figure 5: Number of franchised dealership outlets, 2000-11
- Innovation moves online
- The consumer
- Car ownership and purchasing remains complex
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- Figure 6: Number of cars in household, March 2012
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- Figure 7: Car buying in the next 12 months, March 2012
- Figure 8: Resources used to research which vehicle last bought, March 2012
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- Figure 9: Attitudes towards car dealerships, March 2012
- What we think
Issues in the Market
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- When will new car sales recover?
- Do the public prefer buying used?
- Where next for the car market?
- How will manufacturers cope with a fragmenting market?
- How should dealers and others engage with buyers?
Future Opportunities
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- Influentials
- Slow It All Down
- Old Gold
Internal Market Environment
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- Key points
- Expenditure on cars falters
- Costs of running a car continue to increase...
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- Figure 10: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2008-11
- ...with rising fuel prices a major driver
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- Figure 11: Monthly UK petrol, diesel and oil price trends, January 2009-April 2012*
- Running costs higher for petrol vehicles
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- Figure 12: Motoring costs for petrol and diesel cars, by purchase price of car, 2011
- Car prices moving in different directions
- Mixed messages on vehicle replacement intentions
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- Figure 13: Car buying in the next 12 months, March 2012
- Development of the internet as a sales channel
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- Figure 14: Internet and other distance automotive sales (units), 2009 and 2010
Broader Market Environment
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- Key points
- UK economy shows signs of slow recovery
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- Figure 15: GDP, PDI, consumer expenditure and savings, at constant 2007 prices, 2007-17
- Confidence remains depressed
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- Figure 16: GfK NOP Consumer Confidence Index, January 1988-December 2011
- A resilient economy
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- Figure 17: UK retail sales year-on-year growth, BRC vs ONS, 2010-12
- Rise in multiple car ownership continues
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- Figure 18: Number of cars owned, by individual households, 2002-10
- Mixed opportunities from changes in population structure
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- Figure 19: Trends in the age structure of the UK population, 2007-17
- Increasing wealth should encourage trading up
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- Figure 20: Forecast adult population trends, by socio-economic group, 2007-17
- Smaller households set to grow in number
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- Figure 21: Number of households and persons per household, 2007-17
- Older, female drivers looks set to drive forward demand
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- Figure 22: Full car driving licence holders, by age and gender, 1975/76 -2010
Who’s Innovating?
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- Key points
- Online continues to develop as a channel
- Mixed fortunes for existing e-tailers...
- ...with a move towards the use of flash sales by new entrants
- Online classified market becoming more crowded
- Social media continues to prove popular
- Personal Contract Purchase – a new way to buy a car
Market in Context
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- Key points
- Cars are a major item of expenditure
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- Figure 23: Consumer expenditure, by sector (£m), 2010
- Cars performing better than commercial vehicles
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- Figure 24: New car and commercial vehicle sales, 2000-11
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 signs of recovery
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- Figure 25: Total new car registrations, by private, fleet and business sales, 2007-12
- New car sales fail to recover
- Fall in sales since 2010 illustrates difficult retail environment
- The private sector continues to hold back sales
- Used car sales show strong growth
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- Figure 26: Sales of used cars, by volume, 2007-12
- Buyers turning to the used sector
- The future
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- Figure 27: Sales of new and used cars, by volume, 2007-17
- Forecast
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- Figure 28: Best- and worst-case forecasts of new car registrations (volume), 2007-17
- Figure 29: Best- and worst-case forecasts of used car sales (volume), 2007-17
Makes and Models
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- Key points
- Recession forces buyers to make hard decisions
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- Figure 30: Sales of new vehicles, by vehicle type, 2007-11
- Smallest models proving most popular
- Executive and specialist vehicles also see sales rise...
- ...although the market remains dominated by small to mid-sized models
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- Figure 31: Share of new vehicle sales, by vehicle type, 2007-11
- German brands performing well
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- Figure 32: Manufacturer shares of new car registrations, 2009-11
- Audi, VW and BMW all make good progress
- Far East brands face mixed fortunes
- Is a lack of va va voom affecting French brands?
- Individuality proving attractive
- Dealer network in decline
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- Figure 33: Number of UK franchised dealer outlets, 2000-11
- Sales performance affecting dealer presence
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- Figure 34: Ten largest UK franchised dealer networks, by brand and number of outlets, 2007-11
Dealerships
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- Key points
- Dealer market dominated by major groups
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- Figure 35: Top ten dealership groups in the UK*, 2011
- Pendragon leads in terms of outlets
- Individual strategies mean a differing approach to new and used sales
- Arnold Clark and Pendragon are the largest in the new car market
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- Figure 36: Top ten used car dealership groups in the UK*, 2011
- Car supermarkets growing their presence in the market
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- Figure 37: Leading car supermarket operators, 2012
- Online is slowly growing its presence
Retailer Profiles
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- Pendragon
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- Figure 38: Pendragon Group plc, financial performance, 2007-11
- Inchcape
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- Figure 39: Inchcape UK, financial performance, 2007-11
- Jardine Motors Group
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- Figure 40: Jardine Motors Group UK Limited, financial performance, 2007-10
- Greenhous Group
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- Figure 41: Greenhous Group, financial performance, 2006-10
- Lookers
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- Figure 42: Lookers plc, financial performance, 2007-11
- Sytner
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- Figure 43: Sytner Group, financial performance, 2007-10
- Vertu
- Car supermarket operators
- Carcraft
- Cargiant
- Motorpoint
- Factory-owned dealer groups
- Mercedes-Benz Retail
- Ford Retail Group
- Renault Retail Group
- Robins & Day
- Other dealer groups
- Marshall Motor Group
- Listers Group
- JCT600
- Perrys
- Online sellers
- eBay Motors
Advertising and Promotion
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- Key points
- Promotional expenditure is increasing
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- Figure 44: Main media advertising expenditure by car retailers, 2009-11
- New entrants shaking up the shape of the market
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- Figure 45: Main media advertising expenditure by car retailers, top 20 companies, 2009-11
- Webuyanycar.com invests heavily
- Market supports a number of consistent advertisers
- Dealer promotion is focus of activity
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- Figure 46: Main media advertising expenditure by car dealers, top 20 brands, 2011
- Radio increasingly dominates advertising spend
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- Figure 47: Main media advertising expenditure by car retailers, % share, by media type, 2009-11
- Direct mail and press suffer as radio grows share
- Are new media ready to challenge?
The Consumer – Car Ownership
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- Key points
- Most households have access to a car
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- Figure 48: Number of cars in household, March 2012
- A third of households have access to more than one car
- Numerous factors impact on car ownership
- Second-hand cars dominate the market
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- Figure 49: Car ownership, March 2012
- Men more likely to have bought a new car recently
- Young adults more likely to be changing their cars
- Rural drivers hold on to their cars for longer
- Three quarters of cars are over three years old
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- Figure 50: Age of main car, March 2012
- Older vehicles account for three quarters of those on the road
- Income is an important factor in owning a new car
- Oldest cars are likely to be driven by older drivers
The Consumer – Brand Preferences
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- Key points
- Ford and Vauxhall dominate the market
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- Figure 51: Description of main car, March 2012
- UK and European mass-market brands dominate
- Low prices please
- Hatchbacks win over saloons
- Petrol dominates over diesel
- Automatic for the elderly
The Consumer – Car Purchase Behaviour
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- Key points
- Sizeable minority are planning to buy a car soon
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- Figure 52: Car buying in the next 12 months, March 2012
- Recent upturn in planned purchases?
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- Figure 53: Intention to buy a car in the next 12 months, 2008-12
- Young adults and men are most likely to buy in the coming 12 months
- Wealthy and urban dwellers likely to purchase new
- Used vehicles popular with a cross-section of adults
- Older adults and less wealthy least likely to purchase a car soon
- Personal contact important when looking for a car
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- Figure 54: Resources used to research which vehicle you last bought, March 2012
- Keeping it personal
- Dealers and family/friends appeal to different age groups
- Younger buyers find other sources important
- Wealthier individuals show greatest interest in seeking out information
- Drivers of new vehicles are most likely to buy new
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- Figure 55: Car buying in the next 12 months, by age of main car, March 2012
- Over a third of those with the newest cars plan to buy new again in the next 12 months
- Mixed fortunes for manufacturers of new cars
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- Figure 56: Car buying in the next 12 months, by brand of car, March 2012
- Ford owners are more likely to purchase new than Vauxhall owners
- Car value impacts on choice to buy new or used
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- Figure 57: Car buying in the next 12 months, by purchase price of car, March 2012
- New cars are more important for those with more expensive cars
- Owners of automatic cars look a more attractive new car proposition
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- Figure 58: Car buying in the next 12 months, by transmission type, March 2012
- A quarter of drivers of automatic cars are set to buy new
- Buyers rely on a few key sources for information
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- Figure 59: Resources used to research which vehicle you last bought, by car buying in the next 12 months, March 2012
- Dealers and friends/family are both important research tools
- Internet and printed media are notable second-tier research tools
The Consumer – Car Dealerships
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- Key points
- Dealers are viewed with caution by many buyers
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- Figure 60: Attitudes towards car dealerships, March 2012
- Significant minority of consumers have concerns about dealers
- Improvements are seen as necessary by some consumers
- Desire for value can affect how consumers interact with a dealer
- Men are demanding
- Dealers have strong connection with older drivers
- Wealthier drivers have strong opinions on dealers
- New car buyers hold more positive views towards dealers
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- Figure 61: Attitudes towards car dealerships, by car ownership, March 2012
- Owners of recently purchased new vehicles are more positive
- Used buyers hold a number of concerns
- New buyers with older vehicles have mixed views
Appendix – The Consumer: Car Ownership
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- Figure 62: Number of cars in household, by demographics, March 2012
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- Figure 63: Car ownership, by demographics, March 2012
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- Figure 64: Age of main car, by demographics, March 2012
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Appendix – The Consumer: Brand Preferences
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- Figure 65: Brand, by demographics, March 2012
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- Figure 66: Purchase price, by demographics, March 2012
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- Figure 67: Most popular body type, by demographics, March 2012
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- Figure 68: Next most popular body type, by demographics, March 2012
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- Figure 69: Fuel type, by demographics, March 2012
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- Figure 70: Transmission type, by demographics, March 2012
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Appendix – The Consumer: Car Purchase Behaviour
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- Figure 71: Car buying in the next 12 months, by demographics, March 2012
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- Figure 72: Most popular resources used to research which vehicle you last bought, by demographics, March 2012
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- Figure 73: Next most popular resources used to research which vehicle you last bought, by demographics, March 2012
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Appendix – The Consumer: Car Dealerships
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- Figure 74: Most popular attitudes towards car dealerships, by demographics, March 2012
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- Figure 75: Next most popular attitudes towards car dealerships, by demographics, March 2012
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