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UK Car Review - UK - February 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Car sales fall for second consecutive year
Figure 1: UK new and used car sales, by volume, 2013-23
New car sales have fallen more than those in the used sector since 2016
Figure 2: New and used car market volumes, 2013-18
Mini/supermini segment suffers a dramatic fall in its profile
Figure 3: New car registrations by broad segment (share), 2013 and 2018
Diesel cars account for a much reduced share of new sales
Figure 4: Sales of new cars by fuel type, 2013 and 2018
Companies and brands
Mass market manufacturers lose out as buyers trade up
Premium brands offer the best combination of trust and differentiation
Figure 5: Attitudes towards and usage of selected brands, December 2018
Fall in advertising expenditure reflects wider difficulties for the car market
Automation dominates innovation
The consumer
Over 7 out of 10 adults own a car
Figure 6: Car ownership, November 2018
The majority of cars in ownership are used
Figure 7: Age of car owned, November 2018
Most without a car also don’t possess a driving licence
Figure 8: Other access to cars, November 2018
Nearly 6 out of 10 car owners have a small or medium-sized vehicle
Figure 9: Type of car owned, November 2018
Environmental concerns are most likely to put off purchasing a diesel car
Figure 10: Concerns about diesel, November 2018
Digital is the main source for information on cars
Figure 11: Sources of information, November 2018
Less than 1 in 10 adults is interested in a fully autonomous car
Figure 12: Autonomous driving, November 2018
What we think
ISSUES AND INSIGHTS
What next for the car market?
The facts
The implications
Interest in diesel collapses amongst new car buyers
The facts
The implications
Overall interest in autonomous vehicles is low
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Car market is expected to see mixed fortunes going forward
Car ownership polarises between new and old vehicles
Car ownership varies by location and wealth
Franchised dealers are the most important route for car buyers
Cars dominate for trips over 1 mile
MARKET SIZE AND FORECAST
Car sales set to continue to decline in 2018
Figure 13: UK new and used car sales, by volume, 2013-23
Figure 14: Best- and worst-case forecasts for UK new and used sales, 2013-23
Forecast methodology
MARKET SEGMENTATION
Car sales heading downward
Figure 15: New and used car market volumes, 2013-18
Nearly a quarter of cars are 12 years or older
Figure 16: Age structure of the UK car parc in years, 2013-17
Increase in second car ownership offers opportunities for the market
Figure 17: Percentage of households with car availability, England, 2007-17
Car ownership varies across the country
Figure 18: Household car ownership by region (England), 2006/07 and 2016/17
Wealthiest are more likely to own more than one car
Figure 19: Percentage of households with cars by income group (United Kingdom), 2016/17
Dual and multipurpose vehicles perform best in what is a declining market…
Figure 20: New car registrations, by broad segment, 2013-18
…as the mini/supermini segment suffers a fall in its profile
Figure 21: New car registrations by broad segment (share), 2013-18
Dual-purpose cars are now the third most important category in the market
Figure 22: New car registrations by category, 2015, 2016 and 2017
Diesel sales fall to less than a third of new vehicles …
Figure 23: Sales of new cars by fuel type, 2013-18
…but continue to challenge petrol in the overall car market
Figure 24: Number of licensed cars (Great Britain), million units, 2013-18
CHANNELS TO MARKET
Franchised dealers benefit from recent buoyant new car sales
Figure 25: Sales of new and used cars, by channel, 2013-17
MARKET DRIVERS
Older licence holders are more likely to be men
Figure 26: Full car driving licence holders by age and gender, England, 2017
Trips taken each year are down if walking is excluded
Figure 27: Trips, distance travelled and time taken, England, 2007-17
Cars dominate for trips over 1 mile
Figure 28: Mode share of trips by main mode (different trip lengths), England, 2017
Rising costs hit those owning and using a car
Figure 29: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2013-17
Over half of adults plan to buy a car in the next 3 years
Figure 30: Do you or someone else in your household plan to buy a car(s) within the next 3 years, November 2018
Buying new dominates although used is growing its share
Figure 31: Intention of purchasing a car/s in the next three years, by new or used/second-hand purchase, November 2018
London leads with growing restrictions on using vehicles in cities
Electric and hybrid cars are growing their share of the market
Figure 32: Hybrid and electric new car registrations (Great Britain), by volume, 2013-23
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Mass market manufacturers suffer from fall in share
Automation is a focus of activity by car manufacturers
Advertising support falls back after peaking in 2016
Brands occupy distinct positions within the market
MARKET SHARE
Mass market manufacturers suffer a fall in market share
Mercedes-Benz is the best performing major brand
Figure 33: Manufacturer shares of new car registrations, 2012, 2014, 2016 and 2018
Small cars dominate the new car market
Figure 34: Top 10 new car models, 2018
Ford Fiesta leads used car market
Figure 35: Top 10 used car models, 201
LAUNCH ACTIVITY AND INNOVATION
Hyundai explores holographic augmented reality
Figure 36: WayRay holographic augmented reality technology, January 2019
Ford looks at the development of smarter systems for European cities …
…as well as broadening activity outside of the automotive sector
Volvo pushes towards sustainability
Volkswagen partners with Microsoft to offer new IoT platform
Audi announces plans for 5G-connected cars
ADVERTISING AND MARKETING ACTIVITY
Advertising support down since peaking in 2016
Figure 37: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2014-18
4x4s and SUVs now dominate category expenditure
Figure 38: Recorded above-the-line, online display and direct mail total advertising expenditure, by type of car, 2014-18
Mass market manufacturers raise investment
Figure 39: Recorded above-the-line, online display and direct mail total advertising expenditure by leading car manufacturers, 2014-18
Television re-asserts its dominance
Figure 40: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2014-18
Nielsen Ad Intel coverage
BRAND RESEARCH
Premium brands offer the best combination of trust and differentiation
Figure 41: Attitudes towards and usage of selected brands, December 2018
Key brand metrics
Figure 42: Key metrics for selected brands, December 2018
Brand attitudes: Tesla stands out as by far the most innovative brand in the market
Figure 43: Attitudes, by brand, December 2018
Brand personality: Volkswagen’s unethical performance continues to affect the brand
Figure 44: Brand personality – Macro image, December 2018
Brand personality: Far Eastern brands are associated with being user-friendly
Figure 45: Brand personality – Micro image, January 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
70% of adults own a car
Men and young adults are important car buyers in the last 2 years
Age, income and employment strongly affect non-car ownership
Small and medium-sized cars are the most important sectors
Environmental concerns are strongly associated with diesel
Digital is a key channel for information on cars
Less than 1 in 10 adults are interested in a car that can drive itself
CAR OWNERSHIP
More than 7 out of 10 adults own a car
Figure 46: Car ownership, November 2018
Wealth plays a major factor in car ownership
Car ownership is gradually increasing
Figure 47: Car ownership, 2014-18
AGE OF CAR OWNED
Cars purchased used represent a bigger market
Figure 48: Age of car owned, November 2018
Young and old adults focus on different market sectors
Men are likely to buy new while women are more likely to buy used
City residents favour buying new
Wealth impacts strongly on new and used choice
New car sales have benefitted most in recent years
Figure 49: Age of car owned, 2014-18
OTHER ACCESS TO CARS
The majority of those without a car don’t possess a driving licence
Figure 50: Other access to cars, November 2018
Age is the most important factor for non-car ownership
Older adults have the potential to become car owners
TYPE OF VEHICLE OWNED
Car owners prefer smaller cars
Figure 51: Type of car owned, November 2018
Women prefer smaller cars
Specialist categories popular with those in rural areas
Small and specialist cars popular with the most affluent
SUVs are the star performer in the market
Figure 52: Type of car owned, 2014, 2016, 2018
CONCERNS ABOUT DIESEL
Environmental worries dominate diesel concerns
Figure 53: Concerns about diesel, November 2018
Environmental concerns are greatest amongst those in cities
Costs of owning a diesel high amongst wealthier socio-economic groups
Poor resale value is more important for older adults
Parents with children are more aware of alternatives
Repertoire analysis records interest of older adults, city dwellers and higher earners in having multiple concerns
Alternative technologies to diesel are of interest for new car buyers
SOURCES OF INFORMATION
Digital is the main source for information on cars
Figure 54: Sources of information, November 2018
Young men access a wide range of channels for information on cars
City residents shun digital communication
Wealthy and affluent adults use a variety of channels
Owners of new cars are most interested in information
Digital is helping broaden communication
Figure 55: Sources of information, 2017 and 2018
AUTONOMOUS DRIVING
Less than 1 in 10 adults is interested in a fully autonomous car
Figure 56: Autonomous driving, November 2018
Young men are most interested in automated cars
Affluent adults are another important market
Cities and rural environments illustrate strong contrasts
Owners of new cars are most interest in autonomous driving
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data Sources
Exclusions
Market sizing and segment performance
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast tables
Figure 57: New and used car market sales, by volume, 2013-23
Figure 58: Forecast of new and used car sales, by volume – Best- and worst-case scenarios, 2018-23

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