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, 2008-18
- Market factors
- Companies, brands and innovation
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- Figure 2: Company share of the vehicle recovery market, by members, 2013
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- Figure 3: Key channel groups used to acquire breakdown cover, 2013
- The consumer
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- Figure 4: Reasons for not having breakdown cover, June 2013
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- Figure 5: Reasons for purchasing breakdown cover, June 2013
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- Figure 6: Ownership of breakdown cover, by recovery organisation, 2011-13
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- Figure 7: Level of vehicle cover held, June 2013
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- Figure 8: Most important factors when choosing breakdown cover, June 2013
- What we think
Issues in the Market
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- What future for private motoring?
- How do smaller players cope with a resurgent big three?
- Ways of overcoming price competition
- Company websites set to become increasingly important
- Changing profile of market – older and less affluent
Trend Applications
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- Prepare for the Worst
- Extend my brand
- Mintel Futures Trend – Old Gold
Internal Market Environment
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- Key points
- Car market continues to recover
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- Figure 9: New and used car registrations, 2007-13
- Overall sales still down on pre-recession numbers
- New vehicle sales show signs of strengthening
- Distance travelled drops back since 2005
- Multiple car ownership on hold?
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- Figure 10: Number of cars owned by individual households, 1992/94-2012
- Costs of running a car growing faster than those to purchase a car
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- Figure 11: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2009-12
- Number of licence holders creeping upwards
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- Figure 12: Number of licence holders, by age, 1975/76-2012
- Battery problems dominate call-outs
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- Figure 13: Top ten most common breakdown call-outs in 2011 and 2012 (AA roadside patrols only)
- Electrical difficulties take first and third place
- Some problems record a rise against 2011
- Bundling with bank accounts
Broader Market Environment
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- Key points
- UK economy set for slow recovery
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- Figure 14: GDP, PDI, consumer expenditure and savings, at constant 2008 prices, 2008-18
- GDP growth set to be modest in the short term
- Consumer expenditure forecasts present a more positive picture
- GDP growth remains fragile
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- Figure 15: GDP quarterly percentage change, Q1 2006-Q2 2013
- Consumer confidence remains weak
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- Figure 16: GfK NOP Consumer Confidence Index, January 1988-January 2013
- UK workforce continues to expand
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- Figure 17: Employment and unemployment, by gender, 2008-18
- Less affluent represent expanding sector
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- Figure 18: Forecast adult population trends, by socio-economic group, 2008-18
- UK population continues to age
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- Figure 19: Trends in the age structure of the UK population, 2008-18
- Number of retired adults set to see strong growth
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- Figure 20: Forecast adult population trends, by lifestage, 2008-18
- Gradual shift away from large to small households
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- Figure 21: Number of households and persons per household, 2008-18
Who’s Innovating?
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- Key points
- Recovery patrols prepare to go electric
- Diagnostic technology becomes a reality
- Vehicles helping rescue workers...
- ...as well as other road users
Competitive Context
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- Key points
- Increases in car running costs drive upwards value of market
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- Figure 22: UK transport market value, by segment, 2007-12
- Operating cost increases especially significant since 2008
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- Figure 23: Annual percentage change in transport costs, 2005-11
- Second-hand cars remain a competitively priced purchase
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- Figure 24: Price indices of new and used cars, 1996-2012
- Fuel prices record a significant increase
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- Figure 25: Index of premium unleaded and diesel fuel prices, 2000-12
- Economic slowdown impacting on mileage driven
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- Figure 26: Road traffic (billion vehicle miles) in Great Britain, by vehicle type, 2000-12
- Annual mileage in decline since 2007
- Public transport hit hardest since 2007
- Competition within breakdown market remains an issue
Strengths and Weaknesses
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- Strengths
- Weaknesses
Market Size and Forecast
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- Key points
- Revenues begin to show signs of recovery
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- Figure 27: UK vehicle recovery market, by value, at current and constant prices, 2008-18
- Revenues start to show growth
- Entry of UK into recession hit sector hard
- Price competition raises its profile
- The future
- Forecast
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- Figure 28: Best- and worst-case forecasts of vehicle recovery market, by value, 2008-18
Segment Performance
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- Key points
- Regular membership is on the up
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- Figure 29: Segmentation of the vehicle recovery market, by value, at current prices, 2008-13
- Growing share of fees from regular membership
- Ad hoc membership market stagnates
- Price competition rife
Market Share
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- Key points
- Competition from rivals hits AA’s dominant position
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- Figure 30: Company shares of the vehicle recovery market, by UK membership*, 2008-13
- Overall membership remains stable
- AA retains clear leadership...
- ...despite challenge from rivals
- Are major changes around the corner for the market?
- Green Flag seeking to remain competitive on price
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- Figure 31: Prices of breakdown recovery products for the AA, RAC and Green Flag, 2012 and 2013
- Green Flag leads in all price points where it competes...
- ...with greatest price advantage with added-value services
- Prices rising faster than inflation
Companies and Products
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- The AA (Automobile Association)
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- Figure 32: Key financials for the Automobile Association Limited, 2011 and 2012
- RAC
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- Figure 33: Key financials for RAC Limited, 2010 and 2011
- Green Flag
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- Figure 34: Key financials for Green Flag Limited, 2011 and 2012
- Other companies
- Britannia Rescue
- Allianz Global Assistance
- Rescuemycar.com
- Road to Recovery
- Autonational Rescue
- GEM Motoring Assist
- First Call GB
- Breakdown Direct
- Aria Assistance
- AXA Assistance
- Retailer-branded breakdown cover
- Tesco
- Asda
- Sainsbury’s
- The Co-operative
- Car manufacturer-branded breakdown cover
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- Figure 35: Car manufacturer-branded breakdown cover on new car purchases, 2013
- Roadside assistance and breakdown cover from banks
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- Figure 36: Packaged current accounts that offer roadside and breakdown cover, 2013
Brand Communication and Promotion
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- Key points
- Advertising expenditure falls back
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- Figure 37: UK main media advertising expenditure on vehicle breakdown and recovery services, 2009-12
- Summer months appear the most important time for advertisers
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- Figure 38: Main media advertising expenditure on vehicle breakdown and recovery services, by month, 2012
- Television back in vogue
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- Figure 39: Main media advertising expenditure on vehicle breakdown and recovery services, % share by media type, 2009-12
- RAC moves into the lead as the biggest spender
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- Figure 39: Main media advertising expenditure on vehicle breakdown and recovery services, by advertiser, 2009-12
Channels to Market
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- Key points
- Less than 40% of drivers buy direct
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- Figure 40: Key channel groups used to acquire breakdown cover, June 2013
- Comparethemarket.com dominates price comparison market
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- Figure 41: Choice of financial information sites, April 2013
- Comparing comparison sites is commonplace
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- Figure 42: Repertoire of aggregator sites used, April 2013
The Consumer – Presence of Recovery Organisations
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- Key points
- The AA holds strongest position within the market
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- Figure 43: Ownership of vehicle breakdown cover, by recovery organisation, June 2013
- AA proving popular with 17-24s and affluent drivers
- RAC records much broader appeal
- Green Flag and other providers attract older and middle-income drivers
- Londoners show strong interest in the AA
- Smaller companies lose out as market shows signs of consolidation
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- Figure 44: Ownership of breakdown cover, by recovery organisation, 2011-13
The Consumer – Level of Cover Held
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- Key points
- Basic cover and recovery most popular package
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- Figure 45: Level of vehicle cover held, June 2013
- Older adults want more
- City dwellers most interested in the basic cover
- Socio-economic status has limited impact on purchasing choice
- Big three face challenge when it comes to more demanding clients
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- Figure 46: Ownership of vehicle breakdown cover, by recovery organisation, by level of vehicle breakdown cover, June 2013
The Consumer – How Cover is Acquired
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- Key points
- Buying on a company website proves the most popular
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- Figure 47: How breakdown cover was acquired, June 2013
- Online and bundling are proving popular with the youngest drivers
- Those struggling to pay bills prefer insurance for free
- Online is proving increasingly popular with purchasers
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- Figure 48: How breakdown cover was acquired, 2011-13
- Sales channels play a major role in choice of company
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- Figure 49: Ownership of vehicle breakdown cover, by recovery organisation, by how breakdown cover was acquired, June 2013
The Consumer – Key Factors When Choosing Breakdown Cover
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- Key points
- Response times dominate consumer thinking
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- Figure 50: Most important factors when choosing breakdown cover, June 2013
- Women major on response times and non-related services
- Older adults have more specific demands than the young
- Low-cost providers favoured by the young and middle-aged
- AA and RAC are sought by the most demanding motorists
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- Figure 50: Ownership of vehicle breakdown cover, by recovery organisation, by most important factors when choosing breakdown cover, June 2013
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- Figure 51: Ownership of vehicle breakdown cover, by recovery organisation, by next most important factors when choosing breakdown cover, June 2013
The Consumer – Reasons for Purchasing Breakdown Recovery Insurance
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- Key points
- Peace of mind dominates reasons for purchasing cover
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- Figure 52: Reasons for purchasing breakdown cover, June 2013
- Women are more likely to have a reason to hold insurance
- Old and young drivers have different reasons for having insurance
- Where you live is a factor in holding insurance
- Middle income earners more concerned about breakdown
- Few purchasers select a breakdown recovery organisation based on their specific needs
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- Figure 53: Ownership of vehicle breakdown cover, by recovery organisation, by reasons you have bought breakdown cover, June 2013
The Consumer – Why Cover Is Not Held
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- Key points
- Price is a barrier towards not holding breakdown recovery insurance
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- Figure 54: Reasons for not having breakdown cover, June 2013
Appendix – The Consumer- Presence of Recovery Organisations
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- Figure 55: Most popular ownership of vehicle breakdown cover, by recovery organisation, by demographics, June 2013
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- Figure 56: Next most popular ownership of vehicle breakdown cover, by demographics, June 2013
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Appendix – The Consumer – Level of Cover Held
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- Figure 57: Most popular level of vehicle breakdown cover, by demographics, June 2013
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- Figure 58: Next most popular level of vehicle breakdown cover, by demographics, June 2013
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Appendix – The Consumer – How Cover Was Acquired
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- Figure 59: Most popular how breakdown cover was acquired, by demographics, June 2013
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- Figure 60: Next most popular how breakdown cover was acquired, by demographics, June 2013
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Appendix – The Consumer – Key Factors When Choosing Breakdown Cover
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- Figure 61: Most important factors when choosing breakdown cover, by demographics, June 2013
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- Figure 62: Next most important factors when choosing breakdown cover, by demographics, June 2013
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- Figure 63: Other important factors when choosing breakdown cover, by demographics, June 2013
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Appendix – The Consumer – Reasons For Purchasing Breakdown Recovery Insurance
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- Figure 64: Most popular reasons you have bought breakdown cover, by demographics, June 2013
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- Figure 65: Next most popular reasons you have bought breakdown cover, by demographics, June 2013
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