Table of Contents
Overview
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- Key issues covered in this report
- COVID-19: Market context
- Economic and other assumptions
- Products covered in this Report
Executive Summary
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- Impact of COVID-19 on the car aftermarket
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on the car aftermarket, November 2020
- The market
- Revenues are expected to suffer minimal disruption from COVID-19
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- Figure 2: Market size and forecast for the car aftermarket, 2015-25
- Replacement tyres are the most valuable sector of the market
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- Figure 3: Segmentation of the car aftermarket, by value (%), at current prices, 2015-20
- Independent garages dominate what are a number of channels
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- Figure 4: Aftermarket outlets for replacement parts, 2020 (est)
- Growth of the car parc offers ever more opportunities for replacement parts
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- Figure 5: Number of licensed cars (Great Britain), million units, 2000-2019
- Companies and brands
- Fragmented supply chain with many companies focused on particular sectors
- Innovations address sustainable challenges
- Reduced expenditure by tyre sector drags down overall promotional spend
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- Figure 6: Recorded above-the-line, online display and direct mail total advertising expenditure on car aftermarket products, 2015-19
- The consumer
- Hybrid and electric models begin to challenge dominance of traditional cars
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- Figure 7: Vehicle ownership, September 2020
- Older cars are growing in importance
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- Figure 8: Age of car owned, 2016-20
- Majority of car owners are responsible for their own maintenance and servicing
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- Figure 9: Responsibility for maintenance and servicing, September 2020
- Older drivers are important when it comes to preventative parts replacement
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- Figure 10: Reasons for maintenance, September 2020
- Traditional retail channels are popular with young adults
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- Figure 11: Interest in in-store purchasing, September 2020
- Men’s interest in specific retail channels changes by age
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- Figure 12: Preference for in-store channels, September 2020
- Older adults are yet to be persuaded about shopping online
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- Figure 13: Interest in online purchasing, September 2020
- Manufacturers are in a strong position to sell direct
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- Figure 14: Preference for online channels, September 2020
- Young adults record strong interest in used or refurbished parts
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- Figure 15: Interest in purchasing used or refurbished parts, September 2020
- New channels challenge existing routes when purchasing used or refurbished parts
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- Figure 16: Use of particular retailers/outlets for purchasing used or replacement parts, September 2020
Issues and Insights
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- Outlets selling and fitting parts remain open, likely softening the impact of COVID-19
- Online has the potential to benefit from the COVID-19 pandemic
- Used and refurbished parts have the opportunity to grow their presence in the market
The Market – Key Takeaways
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- COVID-19 is expected to have a limited impact on the car aftermarket …
- … although its effect is expected to be greater on replacement tyres
- Demand for used and refurbished tyres cannot be underestimated
- Majority of channels focus on use of others for fitting replacement parts
- Growth and ageing of the car parc are major drivers for sales
Market Size and Forecast
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- Aftermarket is expected to perform better than the wider auto sector
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- Figure 17: Short-, medium- and long-term impact of COVID-19 on the car aftermarket, November 2020
- Initial lockdown
- Re-emergence
- Recovery
- Revenues benefit from recent steady growth
- COVID-19 is forecast to have limited impact on demand during 2020
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- Figure 18: Market size and forecast for the car aftermarket, 2015-25
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- Figure 19: Market size and forecast for the car aftermarket, 2015-25
- Replacement tyres dominate the aftermarket
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- Figure 20: Segmentation of the car aftermarket, by value, at current prices, 2015-20
- Market drivers and assumptions
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- Figure 21: Key drivers affecting Mintel’s market forecast, 2015-2025 (prepared on 15th October 2020)
- Learnings from the last recession
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- Figure 22: the car aftermarket, by value, 2007-2012
- Forecast methodology
Market Segmentation
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- Tyre revenues perform better than volumes
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- Figure 23: Tyre sales, by value (at current prices) and volume, 2015-20
- Average tyre prices have been increasing since 2017
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- Figure 24: Average tyre price (fitted), 2015-20
- Premium tyres remain popular… at least for now
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- Figure 25: Tyre sales, by price position (percentage volume), 2015-20
- Summer tyres are preferred as all-season variants mount a challenge
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- Figure 26: Tyre sales, by type (volume), 2015-20
- Part-worn sales have the potential to be stimulated by any future economic slowdown
- Other replacement parts continue to be affected by inflationary pressure
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- Figure 27: Segmentation of the other replacement parts market, by value, at current prices, 2015-20
- Sustainability injects new life into remanufactured sector
Channels to Market
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- Intermediaries dominate key channels of distribution
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- Figure 28: Aftermarket outlets for replacement parts*, 2016, 2018 and 2020
- Independent garages represent the largest number of outlets
- Forecourt network sees stability after recent contraction in sites
- Consolidation impacts franchised dealer sites
- Growth in fast-fit reflects consumer demand for speed
- Car accessory shop numbers in steady decline
- Motor factor network sees stability
- Internet purchasing is expected to grow in importance
Market Drivers
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- Growth in UK car parc is vital for the aftermarket
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- Figure 29: Number of licensed cars (Great Britain), million units, 2000-2019
- Owning two or more vehicles is increasing
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- Figure 30: Percentage of households with car availability, England, 2009-19
- COVID-19 expected to depress new and used car sales
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- Figure 31: New and used car market volumes, 2015-20
- An ageing car parc presents clear opportunities for after part sales
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- Figure 32: Age structure of the UK car parc in years, 2015-19
- Dual-purpose cars have been the big winner since 2010
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- Figure 33: New car registrations by category, percentage point change, 2010 and 2019
- Economic growth has been slowing since 2014
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- Figure 34: Real GDP (actual and forecast), 2010-24
- Consumer confidence hit by COVID-19
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- Figure 35: Consumer financial confidence, January 2015-July 2020
- MOT testing put on hold during pandemic
- Cost pressures for car owners have moderated recently
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- Figure 36: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2015-19
- A growing number of cars are passing their MOT without issues
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- Figure 37: Road vehicle testing scheme (MOT), selected reasons for failure, car tests, 2018-2019 *
- Part failure and maintenance are the main reasons for replacement
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- Figure 38: Reasons for replacement, 2018 and 2020
- Sluggish interest continues towards used or refurbished parts
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- Figure 39: Interest in purchasing used or refurbished parts, 2018 and 2020
Companies and Brands – Key Takeaways
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- Trading up and innovation are helping premium marques in the tyre market
- Innovations focus on sustainability
- COVID-19 sees advertisers reduce promotional expenditure
Market Share
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- Tyre market sees slowdown in progress from low cost imports
- Established names re-assert their presence
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- Figure 40: UK – replacement tyres: company market share, by volume, 2015-19
- ‘Other’ replacement parts
Launch Activity and Innovation
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- Michelin announces the world’s greenest tyre
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- Figure 41: Michelin e.Primacy tyre
- Imperial College innovates to reduce microplastic release from tyre use
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- Figure 42: Imperial College solution to issue of microplastics from tyres
- Denso demonstrates sustainable approach to manufacturing
- Nissan announces new process for using carbon fibre in parts production
Advertising and Marketing Activity
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- Falling expenditure since 2017 expected to be followed by slump in 2020
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- Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure on car aftermarket products, 2015-20
- Subdued expenditure for 2020 likely reflects more than just COVID-19
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- Figure 44: Total above-the-line, online display and direct mail advertising expenditure on car aftermarket products, 2019 and 2020 (January to September)
- Passenger tyre promotion suffers as expenditure is scaled back
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- Figure 45: Recorded above-the-line, online display and direct mail total advertising expenditure on car aftermarket products, by category, 2015-19
- A number of key advertisers have recently reduced expenditure
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- Figure 46: Recorded above-the-line, online display and direct mail total advertising expenditure on car aftermarket products, by advertiser, 2015-19
- Activity in the promotion of individual car parts is high
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- Figure 47: Recorded above-the-line, online display and direct mail total advertising expenditure on car aftermarket products, by advertiser and campaign, 2019
- Digital is currently the largest channel for advertisers
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- Figure 48: Recorded above-the-line, online display and direct mail total advertising expenditure on car aftermarket products, by media type, 2019
- Nielsen Ad Intel coverage
The Consumer – Key Takeaways
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- Initial worries about the risk of COVID-19 appear to be waning
- Young adults record a high level of interest in hybrid and electric cars
- Differences in vehicles by age offers opportunities for regional marketing
- Women offer potential for greater engagement
- Wealth is an important factor in encouraging the purchase of replacement parts
- Urban areas bring opportunities for traditional retailers
- Online needs further development
- A number of groups would be interested in used or refurbished parts
Impact of COVID-19 on Consumer Behaviour
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- Steady expansion in those less worried about the risk of COVID-19
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- Figure 49: Worries about risk of exposure to COVID-19, April-October 2020
- Little evidence that COVID-19 has changed shopping habits
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- Figure 50: Shopping habits, April-October 2020
Vehicle Ownership
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- While car ownership is high, a significant minority don’t own a car
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- Figure 51: Vehicle ownership, September 2020
- Hybrid and electric cars are proving popular with young adults
- Income is an important divide between those owning standard and hybrid/electric cars
- Young adults are most likely to own another type of vehicle
Age of Car Owned
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- Just over a quarter of cars were purchased in the last three years
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- Figure 52: Age of car owned, September 2020
- Income plays a major part in the age of car owned
- Young men favour newer cars
- Regional differences in vehicle age shouldn’t be overlooked
- Ownership of older cars is growing
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- Figure 53: Age of car owned, 2016-20
Responsibility for Maintenance and Servicing
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- Most owners are responsible for their own vehicle maintenance
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- Figure 54: Responsibility for maintenance and servicing, September 2020
- Men are more likely to have sole responsibility, while women share this with others
- Lower income groups like to be involved personally
- Can a lack of interest by women in maintenance be used as an opportunity?
Reasons for Maintenance
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- Failure is not the only reason for replacing a part
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- Figure 55: Reasons for maintenance, September 2020
- Older adults are more inclined to be influenced by professional recommendations
- Wealth impacts regular parts replacement
- Hybrid and electric car influenced by recommendations
- Older car owners are more inclined to purchase parts when necessary
- Older adults who are not working are an important group for replacing parts through regular maintenance and servicing
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- Figure 56: Car aftermarket – CHAID – tree output, September 2020
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- Figure 57: Car aftermarket – CHAID – table output, September 2020
Interest in In-store Purchasing
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- In-store purchasing is popular …
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- Figure 58: Interest in in-store purchasing, September 2020
- … with young adults a very important group
- Locating stores in major urban areas brings big opportunities
- Replacement part purchasing is popular with wealthy households
- Advertising campaigns are likely to resonate with young families
- Preventative approach towards maintenance attracts hybrid and electric owners
- New car owners favour purchasing from traditional retailers
- Purchasing intentions are lower for those with joint responsibility for maintenance
- Automotive specialists are popular for in-store purchasing
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- Figure 59: Preference for in-store channels, September 2020
- Men’s preferences vary by age
- Low earners want more than just parts
- Older car owners hold out better prospects for retailers
- Automotive retail stores have retained dominance in recent years
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- Figure 60: Likely to purchase in-store, 2018-2020
Interest in Online Purchasing
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- Online is less popular than traditional retail channels
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- Figure 61: Interest in online purchasing, September 2020
- Young men have a strong interest in purchasing online
- Cities offer additional opportunities
- Wealthy adults are also a strong audience
- Strong interest in online retailers from hybrid and electric owners …
- … as well as owners of newer cars
- Online is less popular with those who have joint maintenance responsibilities
- Automotive retailers are also a popular choice for those online
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- Figure 62: Preference for online channels, September 2020
- Older adults have a broad interest in online channels
- Manufacturers’ websites can benefit from the loyalty of affluent car owners
- Auction websites record highest popularity with those who own the oldest vehicles
- Broadening appeal is key to building sales for those online
- No obvious challenge to automotive websites
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- Figure 63: Likely to purchase online, 2018-2020
Interest in Purchasing Used or Refurbished Parts
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- Refurbished parts are currently of limited interest
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- Figure 64: Interest in purchasing used or refurbished parts, September 2020
- Young adults are a key market
- It's not all about income
- Women appear uncertain about going for used or refurbished
- Hybrid and electric cars record high levels of interest
- Those with the oldest cars exhibit a high degree of interest in this market
- Most buyers would look at a specialist outlet for such parts
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- Figure 65: Use of particular retailers/outlets for purchasing used or replacement parts, September 2020
- Specialist outlets are popular with older adults and men
- Young adults are focused on more informal channels
- City dwellers more open to alternatives
- Online and third parties both popular choices with those with older cars
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Exclusions
- Abbreviations
- Consumer research methodology
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