Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
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- Figure 1: Best- and worst-case forecast value of the vehicle recovery market, 2006-16
- Market background
- Companies
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- Figure 2: Membership numbers (million), by company, 2011
- The retail environment
- The consumer
- Small but rising proportion of consumers are not renewing their breakdown cover
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- Figure 3: Vehicle breakdown owners, percentage by age, September 2011
- Offering peace of mind
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- Figure 4: Growth in online acquisition of breakdown cover, 2010 and 2011
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- Figure 5: Online acquisition of breakdown cover, by age, September 2011
Issues in the Market
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- What has been the impact of the recession on the demand for vehicle recovery services?
- What factors have the biggest influence on whether a vehicle owner chooses to have recovery insurance?
- What would encourage those who do not currently have vehicle recovery insurance to purchase it?
- What has been the impact of the internet on both direct sales and sales via intermediaries?
Future Opportunities
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- Trend: Let’s make a Deal
- Trend: Carnivore, Herbivore, Locavore
Internal Market Environment
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- Key points
- New car market shows signs of stagnation...
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- Figure 6: Total new car registrations, by private, fleet and business sales, 2006-11
- ...although growing multiple car ownership continues
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- Figure 7: Number of cars owned by individual households, 1985/86-2008
- Growth in expenditure on transport continues
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- Figure 8: Consumer expenditure on personal transport compared to total consumer spending, 2006-10
- Older drivers growing in importance
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- Figure 9: Driving licence holders, % by age group, 1975/76-2010
- Battery problems are the most common reason for a call out
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- Figure 10: Most common types of call-out, 2011
Broader Market Environment
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- Key points
- What recovery?
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- Figure 11: GDP quarterly percentage change, Q1 2004-Q2 2011
- ABC1s increasingly dominate
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- Figure 12: Forecast adult population trends, by socio-economic group, 2006-16
- Both young families and older drivers set to bring opportunities
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- Figure 13: Trends in the age structure of the UK population, 2006-16
- Retired adults set to grow strongly
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- Figure 14: Forecast adult population trends, by lifestage, 2006-16
- Growing number of one-person households set to continue
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- Figure 15: UK households, by size, 2006-16
- Internet ready to play a growing role in purchasing
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- Figure 16: Broadband penetration, 2005-10
Competitive Context
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- Key points
- Costs for running a car spiral upwards
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- Figure 17: Spending on personal transport, at current prices, 2000 and 2010
- Price of fuel reaching a new high
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- Figure 18: Escalation of price of motor fuel in recent years, pence per litre, January 2009-May 2011
- Car mileage is in decline
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- Figure 19: Road traffic (billion vehicle miles) in Great Britain, by vehicle type, 1980-2010
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Evolution as opposed to revolution
- Interest in apps grows
- Vehicle owners’ club launches service for older cars
- Breakdown recovery for Christmas?
- Offers moving into the coupon market
- Pay-As-You-Go recovery launches in the UK
Market Size and Forecast
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- Key points
- Recovery services market continues to recover from recent recession
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- Figure 20: UK vehicle recovery market*, by value, at current prices, 2006-16
- The future
- Forecast
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- Figure 21: Best- and worst-case forecast value of the vehicle recovery market, 2006-16
- Figure 22: Best- and worst-case forecast value of organisation membership, 2006-16
- Figure 23: Best- and worst-case value of ad hoc revenues, 2006-16
Segment Performance
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- Key points
- Membership is most important to the market
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- Figure 24: Segmentation of the vehicle recovery market, by value, at current prices, 2006-16
- Membership remains important although value has been under pressure
- Ad hoc membership sales remain steady
Market Share
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- Key points
- Membership numbers record small decline
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- Figure 25: Company shares of the vehicle recovery market, by UK membership*, 2006-11
- Green Flag’s policy of competitive pricing evident amongst big three
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- Figure 26: Prices of breakdown recovery products for the AA, RAC and Green Flag, October 2011
- Online discounts and vouchers
Companies and Products
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- Key points
- The big three
- The AA (Automobile Association)
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- Figure 27: Key financials for The Automobile Association Ltd, 2009-10
- RAC
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- Figure 28: Key financials for RAC Motoring Services Ltd, 2009-10
- Green Flag
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- Figure 29: Key financials for Green Flag Ltd, 2009-10
- Other companies
- Britannia Rescue
- Mondial Assistance
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- Figure 30: Key financials of Mondial Assistance (UK) Ltd, 2009-10
- Rescuemycar.com
- Autonational Rescue
- GEM Motoring Assist
- First Call GB Ltd
- Breakdown Direct
- Europ Assistance
- AXA Assistance
- Supermarket-branded breakdown cover
- Car manufacturer-branded breakdown cover
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- Figure 31: Car manufacturer-branded breakdown cover on new car purchases, 2011
Brand Communication and Promotion
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- Key points
- Advertising support is on the up
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- Figure 32: UK main media advertising expenditure on vehicle breakdown and recovery services, 2007-11*
- Direct mail dominates while other channels suffer mixed fortunes
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- Figure 33: Main media advertising expenditure on vehicle breakdown and recovery services, % share by media type, 2007-11
- RAC leads overall expenditure
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- Figure 34: Main media advertising expenditure on vehicle breakdown and recovery services, by advertiser, 2007-11
Channels to Market
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- Key points
- Intermediaries account for 60% of breakdown recovery sales
- Bundling is an important way to purchase from a third party
- Purchasing from aggregator websites remains low
- Use of price comparison sites for searches is high
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- Figure 35: Choice of financial information sites, April 2011
- Loyalty remains in short supply
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- Figure 36: Choice of financial information sites, by number of products bought through aggregators, April 2011
- Accuracy crucial when using price comparison sites
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- Figure 37: Most important factors when using price-comparison sites to compare prices/obtain quotes or purchase financial products, August 2010
The Consumer – Vehicle Ownership
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- Key points
- Cars dominate vehicle ownership
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- Figure 38: Type of vehicle owned, September 2011
- Males, young and elderly adults and families most likely to buy new
- Social grade tends to affect the purchase of new cars
The Consumer – Ownership of Breakdown Cover
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- Key points
- Four fifths of drivers have breakdown cover
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- Figure 39: Ownership of breakdown cover, September 2011
- Older drivers are more likely to hold cover…
- ... as are those in the highest socio-economic group AB
- Lapsed users polarised towards 35-44 age band
- AA growing market share
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- Figure 40: Ownership of breakdown cover, by recovery organisation, 2010 and 2011
- AA and RAC record greatest strengths amongst new car owners
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- Figure 41: Ownership of breakdown cover, by type of vehicle owned, September 2011
The Consumer – How Cover is Acquired
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- Key points
- Consumers purchase insurance from various sources
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- Figure 42: How breakdown cover was acquired, September 2011
- Age plays some role in how breakdown cover purchased
- Low income drivers more likely to purchase cover alongside car insurance
- Purchases online from company websites are on the up
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- Figure 43: How breakdown cover was acquired, 2010 and 2011
- Smaller recovery providers have strengths in specific channels
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- Figure 44: How breakdown cover was acquired, by ownership of breakdown cover, September 2011
The Consumer – Attitudes Towards Breakdown Recovery Services
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- Key points
- Peace of mind and lack of loyalty dominates consumer thinking
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- Figure 45: Attitudes towards breakdown recovery services, September 2011
- Peace of mind important to some
- Young drivers open to influence
- Loyalty more evident with AA and RAC members
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- Figure 46: Attitudes towards breakdown recovery services, by ownership of breakdown cover, September 2011
- Used car drivers are more likely to switch on grounds of cost
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- Figure 47: Attitudes towards breakdown recovery services, by type of vehicle owned, September 2011
Consumer - Reasons For Not Owning Breakdown Cover
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- Key points
- Cost is a major reason why breakdown cover is not held
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- Figure 48: Reasons for not owning breakdown cover, September 2011
- Wealthier owners and men appear to find expense of cover a bigger issue
- Owners of new and used cars have different views
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- Figure 49: Reasons for not owning breakdown cover, by type of vehicle owned, September 2011
- More potential to include breakdown cover with car insurance
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- Figure 50: Incentives for taking out breakdown cover, September 2011
- Young are most likely to be attracted by incentives
- Including breakdown insurance with car insurance is seen as a popular incentive
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- Figure 51: Incentives for taking out breakdown cover, by type of vehicle owned, September 2011
Appendix – Market Size and Forecast
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- Figure 52: Best-case and worst-case value of the vehicle recovery market, 2009-16
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Appendix – Vehicle Ownership
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- Figure 53: Type of vehicle owned, by demographics, September 2011
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Appendix – Ownership of Breakdown Cover
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- Figure 54: Most popular ownership of breakdown cover, by demographics, September 2011
- Figure 55: Next most popular ownership of breakdown cover, by demographics, September 2011
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Appendix – How Cover is Acquired
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- Figure 56: How breakdown cover was acquired, by demographics, September 2011
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Appendix – Attitudes Towards Breakdown Recovery Services
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- Figure 57: Most popular attitudes towards breakdown recovery services, by demographics, September 2011
- Figure 58: Next most popular attitudes towards breakdown recovery services, by demographics, September 2011
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Appendix – Reasons for Not Owning Breakdown Cover
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- Figure 59: Reasons for not owning breakdown cover, by demographics, September 2011
- Figure 60: Incentives for taking out breakdown cover, by demographics, September 2011
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