Table of Contents
Overview
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- Key issues covered in this Report
- COVID-19: Market context
- Impact of the January lockdown and the vaccination rollout
- Economic and other assumptions
- Products covered in this Report
Executive Summary
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- Impact of COVID-19 on the automotive sector
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- Figure 1: Short, medium and long-term impact of COVID-19 on the car sector, February 2021
- The market
- Brexit and COVID-19 combine to wreak havoc on the market
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- Figure 2: UK new and used car sales, by volume, 2015-25
- Slow recovery expected for the market
- UK car parc continues to expand
- Dual-purpose cars have been popular amongst buyers recently
- Online set to benefit from COVID-19
- Leisure is one of a number of important uses for a car
- Companies and brands
- Trading up unaffected by COVID-19 pandemic
- Value brands also continue to see growth
- COVID-19 sees realignment of channel spend
- Many brands have unique positioning
- The consumer
- Easing of concerns associated with COVID-19 should assist car sales
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- Figure 3: Non-essential spending, April-December 2020
- A quarter of adults aren’t car owners
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- Figure 4: Car ownership, November 2020
- Dominance of used cars illustrates challenges for the new car sector
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- Figure 5: Age of car owned, November 2020
- Age and income are key barriers to car ownership
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- Figure 6: Other access to cars, November 2020
- Focus on small cars is likely to win business
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- Figure 7: Type of car owned, November 2020
- Technology could act as a hook for older drivers
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- Figure 8: Interest in innovations, November 2020
- Multiple channels should still be considered for promotion
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- Figure 9: Sources of information, November 2020
- Only half of adults are interested in alternatives to car ownership
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- Figure 10: Alternatives to car ownership, November 2020
Issues and Insights
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- COVID-19 set to both depress and alter demand for cars
- Trade and Cooperation Agreement brings stability to UK car market
- Interest in cars using alternative fuels set to dent SUV profile
The Market – Key Takeaways
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- Action needed to overcome recent falling sales
- Sizeable UK car parc remains a challenge for sellers
- Smaller cars have the opportunity to re-assert their profile
- Online has the potential to benefit from impact of COVID-19
- Wide-ranging demands of many car owners shouldn’t be overlooked
Market Size and Forecast
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- Automotive market badly affected by COVID-19 pandemic
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- Figure 11: Short, medium and long-term impact of COVID-19 on the car sector, February 2021
- Used cars are growing their share of sales
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- Figure 12: New and used car sales, by volume, 2015 and 2020
- AFVs are also up as demand for new diesel cars slumps
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- Figure 13: New car sales, by type, 2015 and 2020
- Brexit and COVID-19 combine to create a difficult period for the market
- Vaccinations and Brexit agreement offer growth opportunities …
- …although new and used sales are unlikely to recover until 2023
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- Figure 14: UK new and used car sales, by volume, 2015-25 (prepared on 12 January 2021)
- Figure 15: UK new and used car sales, by volume, 2015-25 (prepared on 12 January 2021)
- New cars will improve their share slightly
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- Figure 16: New car sales, by new and used, 2021 and 2025
- Cars powered by hybrid and battery technology will increasingly challenge petrol by 2025
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- Figure 17: New car sales, by type, 2021-25
- Market drivers and assumptions
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- Figure 18: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 12 January 2021)
- Learnings from the last recession
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- Figure 19: New car registrations, by volume, 2007-12
- Forecast methodology
Market Segmentation
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- Pandemic impacts on both new and used car sales during 2020
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- Figure 20: New and used car market volumes (UK), million units, 2015-20
- Car parc in excess of 30% larger since 2000
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- Figure 21: Number of licensed cars (Great Britain), million units, 2000-19
- Dual-purpose cars have been the big winner since 2015
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- Figure 22: New car registrations, by category, percentage point change, 2015-20
- COVID-19 offers a boost for AFV sales…
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- Figure 23: Sales of new cars, by fuel type, 2015-20
- …although they still account for a small share of the market overall
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- Figure 24: Number of licensed cars (Great Britain), by fuel type, million units, 2015-20
- Older cars are also growing their profile
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- Figure 25: Age structure of the UK car parc in years, 2015-19
- A growing percentage of households now own two or more vehicles
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- Figure 26: Percentage of households with car availability, England, 2009-19
- Car ownership increases outside of urban areas
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- Figure 27: Household car ownership per household, by rural-urban classification (England), 2018/19
Channels to Market
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- Franchised dealers dominate
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- Figure 28: Sales of cars, by channel, 2016-20
- Profile of online looks set to strengthen following COVID-19
Market Drivers
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- Consumer confidence impacted during 2020 by COVID-19 pandemic
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- Figure 29: Consumer financial confidence, January 2020-January 2021
- Brexit agreement should minimise further economic disruption
- Older men are more likely to hold a driving licence
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- Figure 30: Full car driving licence holders, by age and gender, England, 2019
- Cars are the preferred mode of transport for journeys of more than a mile
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- Figure 31: Mode share of trips, by main mode (different trip lengths), England, 2019
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- Figure 32: Car transport, Great Britain, March-December 2020
- Steady demand for using a car three or more times a week
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- Figure 33: Frequency of using a private car, England, 2009 and 2019
- Leisure is a key use for a car
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- Figure 34: Trips, by purpose per year, private car *, England, 2009 and 2019
- Cost pressures for car owners have moderated recently
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- Figure 35: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2015-19
- Over half of adults plan to buy a car in the next three years
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- Figure 36: Intention of purchasing a car/s in the next three years, November 2020
- Around half of buyers will purchase new in the next three years
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- Figure 37: Intention of purchasing a car/s in the next three years, by new or used/second-hand purchase, November 2020
- Growing restrictions on using a car in urban areas
Companies and Brands – Key Takeaways
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- Digital is a major benefactor of reduced promotional spend
- Polarisation of market towards premium and value continues despite COVID-19
- Strong positioning is essential for a brand’s success
Market Share
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- European brands continue to suffer
- Premium brands continue to perform well
- Value brands also proving popular
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- Figure 38: Manufacturer shares of new car registrations, 2014-20
- Supermini format increasingly popular
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- Figure 39: Top 10 new car models, 2018-20
- Fragmentation evident amongst used car brands
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- Figure 40: Top 10 used car models, 2018-20
Launch Activity and Innovation
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- INTVO pedestrian detection for self-driving cars
- V2X Network offers a platform for autonomous data transactions
- Volvo and indoor car air quality
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- Figure 41: Volvo Advanced Air Cleaner
- Apostera offers augmented reality for drivers
Advertising and Marketing Activity
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- Advertising support sees steady decline since 2016
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- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2016-20
- Spring 2020 lockdown results in sizeable fall in investment
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- Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, by month, 2019 and 2020
- Increasing focus on promoting AFVs
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- Figure 44: Recorded above-the-line, online display and direct mail total advertising expenditure, by type of car, 2016-20
- Most manufacturers have scaled back investment recently
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- Figure 45: Recorded above-the-line, online display and direct mail total advertising expenditure, by leading car manufacturers, 2016-20
- COVID-19 redirects spend towards certain media
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- Figure 46: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2019 and 2020
- Nielsen Ad Intel coverage
Brand Research
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- Ford outpaces premium German marques when it comes to trust
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- Figure 47: Attitudes towards and usage of selected brands, November 2020
- Key brand metrics
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- Figure 48: Key metrics for selected brands, November 2020
- Brand attitudes: Hyundai and Kia are associated with offering good value
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- Figure 49: Attitudes, by brand, November 2020
- Brand personality: Vauxhall suffers from being boring, VW as being unethical
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- Figure 50: Brand personality – macro image, November 2020
- Brand personality: Micro image analysis illustrates specific strengths and weaknesses
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- Figure 51: Brand personality – micro image, November 2020
The Consumer – Key Takeaways
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- Easing of worries associated with COVID-19 should stimulate car sales
- Targeting the quarter of adults who aren’t car owners shouldn’t be overlooked
- Sellers should ensure that they have a strong used focus
- Addressing issue of price could stimulate those without a car
- A focus on small cars is likely to win business
- Technology could act as a hook for older drivers
- A broad channel strategy will help with the important over-35 age group
- Targeting affluent adults shouldn’t be overlooked by those offering alternatives to car ownership
Impact of COVID-19 on Consumer Behaviour
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- Fewer adults are worrying about the risks associated with COVID-19
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- Figure 52: Worries about risk of exposure to COVID-19, April-December 2020
- Fall in those who are shunning non-essential spending
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- Figure 53: Non-essential spending, April-December 2020
Car Ownership
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- Three quarters of adults are car owners
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- Figure 54: Car ownership, November 2020
- Income is a major factor affecting car ownership
- Growing number of adults own a car
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- Figure 55: Car ownership, 2016-20
Age of Car Owned
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- Purchasing used is currently preferred over new
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- Figure 56: Age of car owned, November 2020
- Older adults less likely than other groups to have purchased recently
- Men are important buyers of new cars
- Income plays a major role in the new car market
- New cars are popular for city dwellers
- Slowdown in demand for new cars is increasingly evident
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- Figure 57: Age of car owned, 2016-20
Other Access to Cars
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- Most non-car owners don’t have a driving licence
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- Figure 58: Other access to cars, November 2020
- Young adults are most likely to not hold a driving licence…
- …with income also a factor
- Potential market for car purchasers is significant
Type of Vehicle Owned
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- Small-format cars are the most popular choice amongst owners
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- Figure 59: Type of car owned, November 2020
- Small cars are popular with women…
- …with young adults another important market
- Wealthy favour large and luxury vehicles
- Older adults have potential to maintain SUVs’ profile
- Recent new car purchasers are going small and adding value
- Car owners increasingly want something different
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- Figure 60: Type of car owned, 2016- 20
Interest in Innovations
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- Parking assistance is the most popular innovation sought
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- Figure 61: Interest in innovations, November 2020
- Older adults seek out safety features
- Men looking for assistance with day-to-day driving
- Self-parking is popular for city dwellers
- New car owners show interest in specialist innovations
- SUV owners want it all
- Affluent and older adults are most interested in innovations
Sources of Information
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- Half of adults would rely on digital media for information
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- Figure 62: Sources of information, November 2020
- Young adults seek out a variety of channels
- Digital and television are popular with specific groups
- New car owners seek out a broad range of channels
- Interest in printed media is low for those without a car
- Digital is becoming increasingly popular
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- Figure 63: Sources of information, 2017-20
Alternatives to Car Ownership
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- Car hire is the most popular alternative to ownership
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- Figure 64: Alternatives to car ownership, November 2020
- Young adults show the strongest interest in alternatives
- Young men prefer car hire, young women car sharing
- Affluence is also a factor
- Difficulties with car ownership make urban areas an attractive market
- Non-car owners interested in informal access
- New car owners are an important target group
- Those driving the smallest cars are favourable to alternatives
- Interest in use of car hire is growing as other methods falter
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- Figure 65: Alternatives to car ownership, 2015-20
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Market sizing and segment performance
- Abbreviations
- Consumer research methodology
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