Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
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- Figure 1: The vehicle recovery market, by value, 2007-17
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- Figure 2: The vehicle recovery market, by volume, 2007-17
- Market factors
- Companies, brands and innovation
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- Figure 3: Company share of the vehicle recovery market, by members, 2012
- The consumer
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- Figure 4: Reasons for not having breakdown cover (top 6 responses), 2012
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- Figure 5: How breakdown cover was acquired, June 2012
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- Figure 6: Attitudes towards breakdown recovery services, June 2012
- What we think
Issues in the Market
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- Can membership be increased?
- Are there opportunities to raise revenues?
- How does the market compete with a dominant AA?
- What next in the development of sales channels?
- How can the sector benefit from technology?
Trend Application
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- Green Influencers
- Extend My Brand
- Trend 2012 Access Anything, Anywhere
Internal Market Environment
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- Key points
- Car sales showing signs of recovery
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- Figure 7: New and used car registrations, 2007-12
- Sales depressed during the recent recession
- Used vehicles represent a much stronger market
- Rise in multiple car ownership continues
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- Figure 8: Number of cars owned by individual households, 1992/94-2010
- Costs of running a car continue to rise
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- Figure 9: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2008-11
- Does more older drivers mean more help is needed on the road?
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- Figure 10: Number of licence holders, by age, 1975/76-2010
- Battery and tyre problems dominate call-out requests
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- Figure 11: Top ten most common breakdown call-outs in 2011 (AA roadside patrols only)
Broader Market Environment
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- Key points
- UK economy fails to see any immediate recovery
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- Figure 12: GDP, PDI, consumer expenditure and savings, at constant 2007 prices, 2007-17
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- Figure 13: GDP quarterly percentage change, Q1 2004-Q1 2012
- Rising affluence isn’t the whole story
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- Figure 14: Forecast adult population trends, by socio-economic group, 2007-17
- The number of older adults is set to increase...
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- Figure 15: Trends in the age structure of the UK population, 2007-17
- ...with retired adults witnessing a sizeable expansion in their numbers
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- Figure 16: Forecast adult population trends, by lifestage, 2007-17
- Smaller households increasing in importance
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- Figure 17: Number of households and persons per household, 2007-17
- Internet expansion continues
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- Figure 18: Broadband penetration, 2006-11
Who’s Innovating?
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- Key points
- New ways of reaching out to customers
- Technology remains in vogue
- Ultimate market segmentation – breakdown recovery for campers?
- Eco-friendly car recovery
- Free breakdown cover for used cars
Competitive Context
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- Key points
- Personal transport expenditure spiralling upward
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- Figure 19: Spending on personal transport, at current prices, 2001 and 2011
- Operating cost increases outstrip vehicle purchase costs
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- Figure 20: Annual percentage change in transport costs, 2000-09
- Used car prices fall back
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- Figure 21: Price indices of new and used cars, 2000-09
- Price of fuel reaching a new high
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- Figure 22: Escalation of price of motor fuel in recent years, pence per litre, January 2010-May 2012
- Car mileage is in decline
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- Figure 23: Road traffic (billion vehicle miles) in Great Britain, by vehicle type, 1980-2010
Strengths and Weaknesses
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- Strengths
- Weaknesses
Market Size and Forecast
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- Key points
- Few signs of recovery for the market
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- Figure 24: UK vehicle recovery market, by value, at current and constant prices, 2007-17
- Market remains depressed after falling back in 2008
- Recession and competition hit the sector
- The future
- Forecast
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- Figure 25: Best- and worst-case forecasts of vehicle recovery market, by value, 2007-17
- Figure 26: Best- and worst-case forecasts of vehicle recovery market, by volume, 2007-17
Segment Performance
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- Key points
- Organisation membership dominates the market...
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- Figure 27: Segmentation of the vehicle recovery market, by value, at current prices, 2007-12
- ...although sales are down 8% on 2007
- Ad hoc membership performs somewhat better
- Price competition rife
Market Share
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- Key points
- Economic frailty restrains membership development
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- Figure 28: Company shares of the vehicle recovery market, by UK membership*, 2006-12
- Green Flag suffers the most of the big three
- Smaller companies fail to make impact
- Price isn’t everything when choosing a recovery insurance
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- Figure 29: Prices of breakdown recovery products for the AA, RAC and Green Flag, July 2012
Companies and Products
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- The AA (Automobile Association)
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- Figure 30: Key financials for the Automobile Association Ltd, 2010 and 2011
- RAC
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- Figure 31: Key financials for RAC Ltd, 2010 and 2011
- Green Flag
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- Figure 32: Key financials for Green Flag Ltd, 2010 and 2011
- Other companies
- Britannia Rescue
- Mondial Assistance
- Rescuemycar.com
- Autonational Rescue
- GEM Motoring Assist
- First Call GB Ltd
- Breakdown Direct
- Europ Assistance
- AXA Assistance
- Retailer-branded breakdown cover
- Car manufacturer-branded breakdown cover
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- Figure 33: Car manufacturer-branded breakdown cover on new car purchases, 2012
- Roadside assistance and breakdown cover from banks
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- Figure 34: Banks’ with-benefits current accounts that offer roadside and breakdown cover, 2012
Brand Communication and Promotion
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- Key points
- Advertising expenditure stagnates
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- Figure 35: UK main media advertising expenditure on vehicle breakdown and recovery services, 2008-12
- Direct mail remains the most popular form of promotion
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- Figure 36: Main media advertising expenditure on vehicle breakdown and recovery services, % share by media type, 2008-12
- The AA tops adspend
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- Figure 37: Main media advertising expenditure on vehicle breakdown and recovery services, by advertiser, 2008-12
Channels to Market
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- Key points
- Not all drivers go direct to purchase recovery insurance
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- Figure 38: Key channel groups used to acquire breakdown cover, June 2012
- Comparethemarket.com leads comparison site market
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- Figure 39: Choice of financial information sites, March 2012
- Is interest in the use of comparison sites waning?
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- Figure 40: Use of financial information sites, April 2011 and March 2012
The Consumer – Vehicle Ownership
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- Key points
- Cars dominate vehicle ownership
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- Figure 41: Type of vehicle owned, June 2012
- Males, older adults and higher income earners most likely to purchase a new car
- Used vehicles popular with all drivers
The Consumer – Presence of Recovery Organisations
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- Key points
- The AA has greatest penetration in the breakdown recovery market
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- Figure 42: Ownership of vehicle breakdown cover, by recovery organisation, June 2012
- AA is well positioned with young and affluent drivers
- Green Flag and smaller providers appeal to older and the less wealthy
- Churn most likely to be seen amongst the middle-aged and those struggling financially
- The AA looks to be growing its presence in the market
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- Figure 43: Ownership of breakdown cover, by recovery organisation, 2010-12
- Individual companies record strengths in particular market sectors
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- Figure 44: Ownership of vehicle breakdown cover, by recovery organisation, June 2012
The Consumer – How Cover is Acquired
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- Key points
- Cover can be acquired indirectly or directly from the insurance provider
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- Figure 45: How breakdown cover was acquired, June 2012
- Young drivers acquiring cover differently
- Income level affects channel decision
- Use of the internet for purchasing is growing
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- Figure 46: How breakdown cover was acquired, 2010-12
- Those buying from AA are more likely to buy direct
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- Figure 47: How breakdown cover was acquired, by ownership of vehicle breakdown cover, by recovery organisation, June 2012
- Roadside assistance is a popular financial benefit
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- Figure 48: Ownership and use of benefits – fee-charging packaged account customers only, April 2012
- Assistance appeals more to men and those on high incomes
The Consumer – Why Cover Is Not Held
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- Key points
- Price is the major barrier in not holding breakdown recovery insurance
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- Figure 49: Reasons for not having breakdown cover, June 2012
The Consumer – Attitudes Towards Breakdown Recovery Services
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- Key points
- Peace of mind and lack of loyalty dominate consumer thinking
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- Figure 50: Attitudes towards breakdown recovery services, June 2012
- Peace of mind important to certain groups
- Young drivers face a dilemma
- Older drivers are flexible on who they are with
- Drivers of used vehicles have more practical demands
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- Figure 51: Attitudes towards breakdown recovery services, by ownership of vehicle breakdown cover, June 2012
- It’s all in the name
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- Figure 52: Attitudes towards breakdown recovery services, by ownership of vehicle breakdown cover, by recovery organisation, June 2012
Appendix – Vehicle Ownership
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- Figure 53: Ownership of vehicle breakdown cover, by demographics, June 2012
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Appendix – Presence of Recovery Organisations
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- Figure 54: Most popular ownership of vehicle breakdown cover, by recovery organisation, by demographics, June 2012
- Figure 55: Next most popular ownership of vehicle breakdown cover, by recovery organisation, by demographics, June 2012
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Appendix – How Cover is Acquired
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- Figure 56: How breakdown cover was acquired, by demographics, June 2012
- Figure 57: Ownership and use of benefits – fee-charging packaged account customers only, by age, April 2012
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- Figure 58: Ownership and use of benefits – fee-charging packaged account customers only, by socio-economic group, April 2012
- Figure 59: Ownership and use of benefits – fee-charging packaged account customers only, by household income, April 2012
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Appendix – Attitudes Towards Breakdown Recovery Services
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- Figure 60: Most popular attitudes towards breakdown recovery services, by demographics, June 2012
- Figure 61: Next most popular attitudes towards breakdown recovery services, by demographics, June 2012
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