Table of Contents
Executive Summary
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- The market
- New and used car sales down for a third successive year
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- Figure 1: UK new and used car sales, by volume, 2014-24
- The new sector has performed worse than the used sector
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- Figure 2: New and used car sales, by volume, 2016-19
- Preferences from buyers shift towards dual/multipurpose cars
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- Figure 3: New car registrations, by broad segment (volume share), 2013 and 2018
- Companies and brands
- Market increasingly split between premium and value brands
- Manufacturers and brands are responding differently to changing market conditions
- Promotional investment down mirroring falling sales
- The consumer
- Nearly three quarters of adults now own a car
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- Figure 4: Car ownership, November 2019
- A majority of cars in ownership were purchased from new
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- Figure 5: Age of car owned, November 2019
- 61% of non-car owners don’t hold a driving licence
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- Figure 6: Other access to cars, November 2019
- Main dealers dominate the market when it comes to sales
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- Figure 7: Where last car was purchased, November 2019
- More adults plan to buy than not buy a car in the next three years
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- Figure 8: Intention to purchase a car in the next three years, November 2019
- Just under half expect to buy in the next 12 months
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- Figure 9: Timescale for purchasing a car in the next three years, November 2019
- New cars account for a steady 51% of planned purchases
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- Figure 10: Likelihood of new or used purchase, November 2019
- Alternative fuels to petrol and diesel are finding increased interest
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- Figure 11: Preference for future fuel types, November 2019
- Price dominates when choosing between brands
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- Figure 12: Purchasing metrics, November 2019
- Costs dominate when purchasing an electric car powered by a battery
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- Figure 13: Purchasing an electric car, November 2019
- What we think
Issues and Insights
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- Recent difficulties for the car market are not over yet
- The facts
- The implications
- Tipping point increasingly approaching for alternative propulsion technologies
- The facts
- The implications
- Polarising market impacts on brand and model share
- The facts
- The implications
The Market – What You Need to Know
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- Sales fell for a third successive year in 2019
- New car sales have been falling faster than those in the used sector
- Interest in dual purpose cars comes from all sectors of the market
- Falling new car sales impacts franchised dealers
- Confidence had been returning but the outlook is now uncertain
Market Size and Forecast
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- Recent weak sales expected to be hit further by the arrival of COVID-19
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- Figure 14: UK new and used car sales, by volume, 2014-24
Market Segmentation
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- Both new and used markets are in retreat
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- Figure 15: New and used car market volumes, 2014-19
- Loss of private buyers is a key reason behind falling new car sales
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- Figure 16: UK new registrations of cars, 2014-19
- South East registers strongest increase in new registrations
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- Figure 17: New car registrations, by region, United Kingdom, 2014-18
- Women are much less likely to register a new car than men
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- Figure 18: New car registrations, by keeper, Great Britain, 2014-18
- Dual/multipurpose vehicles grow are the best performing sector…
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- Figure 19: New car registrations, by broad segment (volume share), 2013 and 2018
- …being popular across all purchasing markets
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- Figure 20: New car registrations, by buying group and segment (volume), 2019
- Interest in diesel fades amongst purchasers…
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- Figure 21: Sales of new cars by fuel type, 2014-19
- ...as buyers increasingly look at electric and hybrid alternatives
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- Figure 22: Sales of new electric cars by type, 2014-19
Channels to Market
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- Falling new car sales halts progress for franchised dealers
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- Figure 23: Sales of cars, by channel, 2015-19
- Franchised dealers dominate the new car market
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- Figure 24: Sales of new cars, by channel, 2019
- Used car retailing is a more open market
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- Figure 25: Sales of used cars, by channel, 2019
- Dealer network contracts by 342 outlets during the past decade
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- Figure 26: Number of UK franchised dealer outlets, 2009-19
- Market performance has resulted in some manufacturers reducing sales points
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- Figure 27: Percentage change in sales points (10 largest), 2009-19
- Consolidation boosts profile of larger groups
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- Figure 28: Top 10 main dealership groups in the UK, by turnover, 2019
- Strong performance from independent retailers
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- Figure 29: Top 10 independent dealership groups in the UK, by turnover, 2018/19
- Online fails to make an impact
Market Drivers
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- Concerns about leaving the EU increase during 2019…
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- Figure 30: Level of concern over the impact of the EU referendum, July 2016-October 2019
- …although appear to have minimal impact on consumer financial wellbeing
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- Figure 31: The financial wellbeing index, January 2015-October 2019
- Unknown impacts remain a concern
- Costs of owning a car have risen noticeably since 2016
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- Figure 32: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2014-19
- Insurance costs down slightly since 2017 peak
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- Figure 33: Average premium for comprehensive car insurance policies, 2014-19
- Consumer lending for cars continues to increase
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- Figure 34: Value of advances (£m) on sales of all cars bought on finance by consumers at point of sale, 2015-19
- Public transport remains popular
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- Figure 35: Public transport passenger journeys (Great Britain), 2008/09-2018/19
- Car hire remains a popular alternative to car ownership
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- Figure 36: UK short-term car rental, by volume (private and corporate), 2014-19
- Car sharing has seen a dramatic expansion in use
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- Figure 37: Car club vehicle and membership growth, 2009 and 2019
- Other alternatives are also available
- Private hire taxis have increased their presence
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- Figure 38: Total licensed taxi and private hire vehicles (England and Wales), 2009-19
Companies and Brands – What You Need to Know
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- Premium brands continue to make progress
- Manufacturers and brands are responding differently to changing market conditions
- Falling sales hit promotional expenditure and channel preferences
Market Share
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- New car buyers opt increasingly for premium brands…
- …with volume car makers suffering as purchasers increasingly seek out value
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- Figure 39: Manufacturer shares of new car registrations, 2013, 2015, 2017 and 2019
- Shift away from mass market brands fragments new model popularity…
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- Figure 40: Leading new car models, 2015-19
- …with the used market seeing the growing presence of premium brands
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- Figure 41: Leading used car models, 2016-19
Competitive Strategies
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- Acquisitions continue but at a muted pace
- Rebranding to streamline market presence
- A number of brands have been affected by retrenchment
Advertising and Marketing Activity
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- Investment down by nearly a fifth between 2017 and 2019
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- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, 2015-19
- Falling investment during 2019 hits traditional investment
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- Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, monthly share of annual expenditure, 2018 and 2019
- Biggest advertisers are also major market players
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- Figure 44: Leading UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2015-19
- Falling investment hits support for television and digital
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- Figure 45: UK car dealers: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2015-19
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- 74% of adults own a car
- Most cars in ownership were purchased new
- Strong link between holding a driving licence and owning a car
- Main dealers are the most important sales channel
- Short term purchasing intentions remain on hold
- Interest in alternatives to petrol are high
- Price is prioritised the highest when comparing brands
- Costs are a major factor when considering a battery-powered electric car
Car Ownership
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- Nearly three quarters of adults now own a car
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- Figure 46: Car ownership, November 2019
- Personal wealth is a major factor impacting on owning a car
- Car ownership is growing
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- Figure 47: Car ownership, 2015-19
Age of Car Owned
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- A majority of cars are purchased from new
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- Figure 48: Age of car owned, November 2019
- Wealth strongly favours the recent purchase of a new car
- Young adults are more likely to have purchased in the last two years
- New cars are popular in London
- Men prefer to buy new
- Sluggish recent sales of new cars evident in ownership data
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- Figure 49: Age of car owned, 2015-19
Other Access to Cars
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- A majority of non-car owners don’t hold a driving licence
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- Figure 50: Other access to cars, November 2019
- Women offer good long-term opportunities as potential car buyers
- Potential market for car purchasers is significant
Where Last Car Was Purchased
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- Main dealers dominate when it comes to purchasing
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- Figure 51: Where last car was purchased, November 2019
- Older adults and the affluent offer opportunities for main dealers
- Private sellers are important to young and less affluent
- Franchised dealers not popular with used car buyers
- Independents benefit from a stronger used car market
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- Figure 52: Where last car was purchased, 2017-19
Car Purchasing Intentions
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- More adults plan to buy than not buy a car in the next three years
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- Figure 53: Intention to purchase a car in the next three years, November 2019
- Wealth is a major factor affecting purchasing intentions
- Older women are more likely to be unsure
- Intention to purchase a car is strengthening
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- Figure 54: Intention of purchasing a car/s in the next three years, 2017-19
- Sizeable percentage of buyers have no immediate purchase plans
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- Figure 55: Timescale for purchasing a car in the next three years, November 2019
- Older buyers are likely to wait before purchasing
- City dwellers and wealthy offer good short-term opportunities…
- …as do families
- Owners of new cars are more likely to buy in the short-term
- Short-term decline in purchasing intentions amongst likely buyers evident
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- Figure 56: Timescale for purchasing a car in the next three years, 2017-19
- New cars are still popular amongst buyers
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- Figure 57: Likelihood of new or used purchase, November 2019
- Wealth is a key factor in decision making
- Men prefer new while women prefer used
- Stability when it comes to new and used choices
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- Figure 58: Intention of purchasing a car/s in the next three years, 2017-19
Preference for Fuel Types
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- Alternatives to petrol show strong interest
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- Figure 59: Preference for future fuel types, November 2019
- Young adults are an attractive target for new fuel types…
- …with older women a major challenge
- Cities present good opportunities
- New car owners should be a target market for emerging technologies
- Hybrid and electric fuels see surge in interest
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- Figure 60: Preference for future fuel types, 2016-19
Car Purchasing Metrics
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- Price is dominant when choosing a brand
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- Figure 61: Purchasing metrics, November 2019
- Men and women focus on different things
- Older adults are the most demanding
- City dwellers are open to new thinking
- Used car owners are likely to be the most price conscious
Purchasing an Electric Car
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- Costs are important when considering an electric car
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- Figure 62: Purchasing an electric car, November 2019
- Older drivers remain a key market to address
- Urban areas are well placed for electric vehicles
- Wealthy buyers should not be overlooked
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Exclusions
- Market sizing and segment performance
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast table
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- Figure 63: New and used car market sales, by volume, 2014-24
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