Table of Contents
Executive Summary
-
- Impact of COVID-19 on the automotive sector
-
- Figure 1: Short-, medium- and long-term impact of COVID-19 on the car sector, February 2021
- The market
- Purchasing affected by Brexit and COVID-19 pandemic
-
- Figure 2: UK new and used car sales, by volume, 2015-25
- Slow recovery expected for the market
- Dual-purpose cars have been popular amongst buyers recently
-
- Figure 3: New car registrations, by broad category (volume share), 2015 and 2020
- COVID-19 disrupts formal sales channels
- Cars see a new role as COVID-19 dents use of public transport
- Companies and brands
- Polarisation of market towards premium and value unaffected by COVID-19
- COVID-19 leads to a realignment of channel spend
-
- Figure 4: UK car dealers: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2019-20
- COVID-19 pandemic sees restricting and investment in online sales capabilities
- The consumer
- Continued presence of COVID-19 set to delay recovery of market
-
- Figure 5: Non-essential spending, May 2020-January 2021
- Opportunities could come from those who aren’t car owners
-
- Figure 6: Car ownership, November 2020
- Dominance of used cars poses challenges for new car retailers
-
- Figure 7: Age of car owned, November 2020
- Age and income are key barriers to car ownership
-
- Figure 8: Other access to cars, November 2020
- Young adults offer online sales opportunities
-
- Figure 9: Where last car was purchased, November 2020
- New car owners hold best prospects for sales in the short term
-
- Figure 10: Intention to purchase a car in the next three years, November 2020
- Sales to those in urban areas offer a good short-term opportunity
-
- Figure 11: Timescale for purchasing a car in the next three years, November 2020
- Sellers need to target wealthy individuals to maximise prospects
-
- Figure 12: Likelihood of new or used purchase, November 2020
- Addressing costs of hybrid and electric cars should broaden demand
-
- Figure 13: Preference for future fuel types, November 2020
- Digital communication is important for potential buyers
-
- Figure 14: Sources of information, November 2020
- Older women offer opportunities for dealers and garages
-
- Figure 15: Online versus face-to-face purchasing, November 2020
Issues and Insights
-
- Not all sectors of the market will recover at the same pace
- Will online finally become an accepted way for purchasing?
- AFV revolution is still someway off
The Market – Key Takeaways
-
- After falling again in 2020 hopes are for stronger sales in 2021
- Smaller format cars grow share of sales as overall demand falters
- Demand for AFVs set to expand further
- Online sales are also starting to become normalised
- Impact on use of public transport during COVID-19 brings about opportunities for cars
Market Size and Forecast
-
- Car sales badly affected by COVID-19 pandemic
-
- Figure 16: Short, medium and long term impact of COVID-19 on car purchasing, February 2021
- Purchasing suffers as COVID-19 compounds difficulties following the Brexit vote
- 2021 offers hope with vaccinations and EU trade agreement
-
- Figure 17: UK new and used car sales, by volume, 2015-25 (prepared on 12 February 2021)
-
- Figure 18: UK new and used car sales, by volume, 2015-25 (prepared on 12 February 2021)
- New cars set to see stronger growth as demand recovers
-
- Figure 19: New car sales, by new and used, 2020-25
- Market drivers and assumptions
-
- Figure 20: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 9 February 2021)
- Learnings from the last recession
-
- Figure 21: new car registrations, by volume, 2007-12
- Forecast methodology
Market Segmentation
-
- Demand for new and used cars has been in decline since 2017
-
- Figure 22: New and used car market volumes (United Kingdom), million units, 2015-20
- Private and business/fleet sales have both been hit by poor sales
-
- Figure 23: UK new registrations of cars, 2015-20
- England remains main market for car sales
-
- Figure 24: New car registrations, by region, United Kingdom, 2015-19
- Personal vehicle registrations in decline
-
- Figure 25: New car registrations, by keeper, Great Britain, 2015-19
- Dual and multipurpose vehicles increase in popularity
-
- Figure 26: New car registrations, by broad category (volume share), 2015 and 2020
- Smaller format cars benefit as sales slump during 2020
-
- Figure 27: New car registrations, by category (volume share), 2019-20
- Private buyers prefer smaller cars
-
- Figure 28: New car registrations, by buying group and category (volume), 2020
- Growing number of buyers opt for AFVs …
-
- Figure 29: Sales of new cars by fuel type, 2015-20
- … with battery electric car sales performing the strongest
-
- Figure 30: Hybrid and electric car new registrations, by type (United Kingdom), by volume, 2015-20
Channels to Market
-
- Franchised dealers dominate
-
- Figure 31: Sales of cars, by channel, 2016-20
- New car market dominated by franchised dealers
-
- Figure 32: Sales of new cars, by channel, 2020
- COVID-19 brings about changes within the used car sector
-
- Figure 33: Sales of used cars, by channel, 2020
- Fall in manufacturer sales points mirrors that of new car sales
-
- Figure 34: Number of UK franchised dealer outlets, 2015-20
- Established manufacturers suffer some of the biggest falls in sales points
-
- Figure 35: Percentage change in sales points, top 10 as of 2020, 2015-20
- Sytner performs well as it strengthens its lead over its rivals
-
- Figure 36: Top 10 main dealership groups in the UK, by turnover, 2016 and 2019
- Car Shops are the best performing of the leading independents
-
- Figure 37: Top 10 independent dealership groups in the UK, by turnover, 2016/17 & 2018/19
- Online fails to make an impact …
- … although this may change after COVID-19
Market Drivers
-
- Brexit agreement should assist car sector beyond 2020
- Consumer confidence impacted during 2020 by the COVID-19 pandemic
-
- Figure 38: Consumer financial confidence, January 2020-January 2021
- Cost pressures for car owners have moderated recently
-
- Figure 39: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2015-19
- Insurance costs continue to fall …
-
- Figure 40: Average premium for comprehensive car insurance policies, 2015-20
- … with mixed messages when it comes to lending
-
- Figure 41: Value of advances (£m) on sales of all cars bought on finance by consumers at point of sale, 2015-20
- Public transport suffers from lockdowns and increase in working at home
-
- Figure 42: Use of selected transport modes (Great Britain), 1 March – 31 December 2020
- Taxi and private hire sector seeing growth
-
- Figure 43: Total licensed taxi and private hire vehicles (England and Wales), 2015-20
- Private car rental underperforms …
-
- Figure 44: UK private short-term car rental, by volume, 2014-19
- … while car sharing benefits from growth
-
- Figure 45: Car club vehicle and membership growth, 2015-20
- Other alternatives are also available
Companies and Brands – Key Takeaways
-
- Buyers continue to move towards premium and value continues despite COVID-19
- Online benefits as COVID-19 depresses promotional support
- COVID-19 further exposes the need to relevant strategies
Market Share
-
- UK car buyers increasingly want something different
-
- Figure 46: Manufacturer shares of new car registrations, 2014-20
- Superminis are proving increasingly popular with buyers
-
- Figure 47: Top 10 new car models, 2018-20
- Fragmentation evident amongst used car brands
-
- Figure 48: Top 10 used car models, 2018-20
Competitive Strategies
-
- Online proving of interest to both existing and new players
- Motordepot offers stronger environmental credentials
- Offering something more from a dealership
- COVID-19 forces some large dealers to restructure …
- … although not all …
- … with Pendragon also addressing a re-brand
Advertising and Marketing Activity
-
- ‘Cazoo’ effect boosts investment during 2020
-
- Figure 49: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, 2016-20
- Spring lockdown during 2020 pushes back dealer investment
-
- Figure 50: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, monthly share of annual expenditure, 2019 and 2020
- Online retailers boost investment as others retreat
-
- Figure 51: Leading UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2016-20
- COVID-19 alters communication strategies
-
- Figure 52: UK car dealers: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2019-20
The Consumer – Key Takeaways
-
- New lockdowns raise concerns about impact of COVID-19 on expenditure
- 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
- Under-25s should be targeted to help develop online purchasing
- New car owners hold best prospects for sales in the short term
- Costs limit interest in hybrid and electric technologies for some
- Potential buyers are most likely to rely on digital sources for information
- Dealers and garages can exploit their popularity with older women
Impact of COVID-19 on Consumer Behaviour
-
- Some evidence of increased concerns as third lockdown hits …
- … although key buying groups continue to be less affected
-
- Figure 53: Worries about risk of exposure to COVID-19, March 2020-January 2021
- Slight increase in those shunning non-essential spending
-
- Figure 54: Non-essential spending, May 2020-January 2021
Car Ownership
-
- Three quarters of adults are car owners
-
- Figure 55: Car ownership, November 2020
- Income is a major factor affecting car ownership
- Car purchase opportunities increasingly come from existing owners
-
- Figure 56: Car ownership, 2016-20
Age of Car Owned
-
- Purchasing used is currently preferred over new
-
- Figure 57: 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
-
- Figure 58: Age of car owned, 2016-20
Other Access to Cars
-
- Most non-car owners don’t have a driving licence
-
- Figure 59: 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 purchasing is significant
Where Last Car Was Purchased
-
- Majority of cars have been purchased at main dealers
-
- Figure 60: Where last car was purchased, November 2020
- Older adults strongly favour franchised dealers
- Those on lowest incomes attracted towards private sellers
- Car supermarkets – an urban experience?
- Under-25s are a key target for those seeking to develop online
- Owners of new cars favour franchised dealers
- No evidence of dealers falling out of favour with car buyers
-
- Figure 61: Where last car was purchased, 2017-20
Car Purchasing Intentions
-
- Strong intention to purchase a car in the next three years
-
- Figure 62: Intention to purchase a car in the next three years, November 2020
- Wealth is a major factor affecting purchasing intentions
- Young men and older women illustrate complexity of the market
- Families shouldn’t be overlooked
- Owners of new cars bought within the last 2 years offer best prospects overall
- Past purchasers from franchised dealers ready to buy again
- Little change in purchase intentions since 2019
-
- Figure 63: Intention of purchasing a car/s in the next three years, 2017-20
- Concerns colour purchasing plans for many
-
- Figure 64: Timescale for purchasing a car in the next three years, November 2020
- Older buyers look to delay on purchasing
- City buyers present a good short-term opportunity
- Targeting wealthy buyers also shouldn’t be overlooked
- New car owners represent the best short-term prospects
- Short-term plans for purchasing a car have fallen back
-
- Figure 65: Timescale for purchasing a car in the next three years, 2017-20
- Nearly half of potential buyers want to buy new
-
- Figure 66: Likelihood of new or used purchase, November 2020
- Wealth favours the purchase of a new car
- Older men and younger women have different demands
- New and used car owners continue with their preferences
- Used cars remain an increasingly popular choice for buyers
-
- Figure 67: Intention of purchasing a car/s in the next three years, 2017-20
Preference for Fuel Types
-
- Hybrid technology is increasingly the main challenger to petrol
-
- Figure 68: Preference for future fuel types, November 2020
- Men are more likely to have a preference towards a particular fuel
- Very youngest adults aren’t the most important market for new fuels
- New technologies of greatest interest to new car buyers
- Hybrid and electric fuels see surge in interest
-
- Figure 69: Preference for future fuel types, 2017-20
Sources of Information
-
- Digital is preferred by potential buyers
-
- Figure 70: Sources of information, November 2020
Online versus Face to Face Purchasing
-
- Online is preferred for undertaking research
-
- Figure 71: Online versus face-to-face purchasing, November 2020
- Online has a big role for middle aged adults
- Role for dealers and garages to help older women
- New cars owners prefer to deal with dealers
- Dealers well positioned for new car owners looking for assistance
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Data sources
- Exclusions
- Market sizing and segment performance
- Abbreviations
- Consumer research methodology
Back to top