Table of Contents
Introduction
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- Definitions
- Abbreviations
Executive Summary
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- The market
- New car sales show only a slow recovery
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- Figure 1: UK new car sales, 2007-17
- Market conditions continue to stifle demand
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- Figure 2: Consumer confidence index, 1988-2013
- Although some better times may be ahead
- Companies, brands and innovation
- Established names come under increased pressure
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- Figure 3: Manufacturer shares of new car registrations, 2012
- Buyers moving away from mass market makes
- The consumer
- Second hand is preferred over new
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- Figure 4: Statements about car ownership, March 2013
- Cost is a major factor for many buyers
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- Figure 5: Amount paid for last car, March 2013
- Main dealers dominate as a sales channel
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- Figure 6: Where last car was purchased, March 2013
- Mixed views from consumers towards purchasing
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- Figure 7: Consumer attitudes towards car purchasing, March 2013
- Price is the single most important factor
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- Figure 8: Considerations when buying a car whether new or second-hand (top 7 factors), March 2013
- Shopping around is popular for many purchasers
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- Figure 9: Agreement with statements (top 5) related to buying a car, March 2013
- What we think
Issues in the Market
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- Where next for new car sales?
- Out with the ordinary
- What is the potential for hybrids and EVs?
- What is the formula for capturing customers?
- Internet begins to slow
Trend Applications
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- Trend: Transumers
- Trend: Return to the Experts
- Future trend: Human
Internal Market Environment
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- Key points
- New car sales remain sluggish...
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- Figure 10: New car registrations, 2007-12
- ... resulting in the ageing of the UK car parc
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- Figure 11: When current car was obtained, 2011 and 2012
- Around half of adults own a main car purchased 3 or more years ago
- Second car ownership also focused on older vehicles
- Purchasing intentions signal trend towards longer replacement cycles
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- Figure 12: Frequency of replacing the car, 2010-12
- ... although 2013 purchases may be up
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- Figure 13: When planned to buy, 2011 and 2012
- Second-hand cars dominate the market...
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- Figure 14: Ownership of new and second-hand vehicles, 2011 and 2012
- ... although with possible growing new car sales
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- Figure 15: Intention to purchase new and second-hand vehicles, 2011 and 2012
- Hatchbacks dominate interest of future purchasers
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- Figure 16: Vehicle choice for those looking to purchase in the next 2 years, 2011 and 2012
- Economic downturn brings decline in car ownership...
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- Figure 17: Household ownership of cars in the UK, 2006-12
- ... although recent stability for fuel prices could help boost car sales
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- Figure 18: Monthly UK petrol, diesel and oil price trends, 2009-13*
- Electric, hybrid and AFVs account for relatively small share of sales
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- Figure 19: Vehicle sales by fuel type, 2008-12
- Hybrids dominate the alternative fuel market
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- Figure 20: Electric, hybrid and AFV sales*, 2010 -12
- Car purchasing is a joint decision
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- Figure 21: Who decided on make and model, 2011 and 2012
Broader Market Environment
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- Key points
- UK economy fails to recover
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- Figure 22: GDP, PDI, consumer expenditure and savings, at constant 2007 prices, 2007-17
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- Figure 23: Trends in GDP quarterly percentage change, 2008-12
- Consumer confidence remains subdued
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- Figure 24: GFK NOP Consumer Confidence Index, January 1988-January 2013
- Employment continues to grow
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- Figure 25: Employment and unemployment, by gender, 2007-17
- Growth in the number of households set to boost demand for personal transport
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- Figure 26: Number of Households and persons per household, 2001-17(proj)
- Rise in the less wealthy hints at change in demand
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- Figure 27: Forecast adult population trends, by socio-economic group, 2007-17
- Positives...
- ... and possible opportunities
- Ageing of the UK population presents opportunities
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- Figure 28: Trends in the age structure of the UK population, 2007-17
Strengths and Weaknesses
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- Strengths
- Weaknesses
Market Size and Forecast
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- Key points
- Hopeful signs of recovery are evident
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- Figure 29: UK new registrations of motor vehicles, 2007-17
- Figure 30: UK new registrations of motor vehicles, 2007-17
- Private sales show greatest variability
- Business and fleet sales market records only modest improvements
- Forecast
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- Figure 31: UK new business/fleet sales registrations of motor vehicles, 2007-17
- Figure 32: UK new private sales registrations of motor vehicles, 2007-17
- A health warning
Segment Performance
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- Key points
- Smaller cars are proving most popular
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- Figure 33: Sales of cars* by type, mini and medium size cars, 2007-12
- Mini segment sales the most dynamic
- Medium-sized vehicle sales in decline
- Demand for dual purpose and executive cars is strong
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- Figure 34: Sales of cars* by type, other cars, 2007-12
- Status and versatility both in demand
- Luxury and sports vehicles disappoint
- Private buyers favour smaller vehicles
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- Figure 35: Sales of new vehicles, % share by purchaser type, 2012
- Individuality appears important for private buyers
- Smaller and more individual models proving popular
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- Figure 36: Share of vehicle types amongst private purchasers, 2010-12
- Mass market vehicle sales suffer
- Dual-purpose vehicles record strongest interest
- Demand for small and executive models further illustrate fragmentation for private sales
- Diesel proving popular
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- Figure 37: Sales of cars* by fuel, 2007-12
- Diesels currently account for over half of the new car market
- AFVs also showing signs of becoming mainstream
Market Shares
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- Key points
- German brands continue to make good progress
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- Figure 38: Manufacturer shares of new car registrations, 2010-12
- Ford continues to perform well
- German brands make good progress as some buyers trade up
- All change for other European brands as competition intensifies
- Asian brands record mixed performance
- Niche brands going mainstream
Who’s Innovating
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- Key points
- Cars coming to owners
- Virtual reality viewing
- Mobile-friendly websites
- RAC offers a helping hand
Retailing Trends
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- Key points
- Dealer network showing signs of stability
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- Figure 39: Number of UK franchised dealer outlets, 2000-12
- Pendragon dominates the dealer market
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- Figure 40: Top ten dealership groups in the UK, by turnover, 2011
- Smaller dealers record some of the strongest improvements in turnover
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- Figure 41: Top ten increased sales UK*, 2012
- Car supermarkets continue to expand presence
- Internet fails to establish itself in the market
Brand Communication and Promotion
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- Key points
- Promotional expenditure shows fluctuations
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- Figure 42: Topline spend in the UK car market, 2009-12
- Big names being challenged by smaller manufacturers
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- Figure 43: Top 20 car manufacturers in the UK, by advertising expenditure, 2009-12
- Promotional expenditure up for a number of established UK players…
- ... with this also true for a number of recent entrants
- Manufacturers prefer to focus expenditure on particular models
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- Figure 44: Top 20 car models in the UK, by advertising expenditure, 2012-13*
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- Figure 45: Advertising expenditure, by channel, 2009-12
- Figure 46: Share of advertising expenditure, by channel, 2009-12
Brand Research
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- Brand map
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- Figure 47: Attitudes towards and usage of brands in the car sector, February 2013
- Correspondence analysis
- Brand attitudes
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- Figure 48: Attitudes by car brand, February 2013
- Brand personality
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- Figure 49: Car brand personality – macro image, February 2013
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- Figure 50: Car brand personality – micro image, February 2013
- Brand experience
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- Figure 51: Car brand usage, February 2013
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- Figure 52: Satisfaction with various car brands, February 2013
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- Figure 53: Consideration of car brands, February 2013
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- Figure 54: Consumer perceptions of current car brand performance, February 2013
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- Figure 55: Car brand recommendation – Net Promoter Score, February 2013
- Brand index
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- Figure 56: Car brand index, February 2013
- Figure 57: Car brand index vs. recommendation, February 2013
- Target group analysis
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- Figure 58: Target groups, February 2013
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- Figure 59: Car brand usage, by target groups, February 2013
- Group One – Conformists
- Group Two – Simply the Best
- Group Three – Shelf Stalkers
- Group Four – Habitual Shoppers
- Group Five – Individualists
The Consumer – Car Ownership
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- Key points
- Second-hand cars dominate ownership
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- Figure 60: Statements about car ownership, March 2013
- New car ownership strongly linked with older and wealthier adults
- Used cars record more mixed appeal
- Car ownership is stronger in rural areas
- Potential car owners focused on young adults and urbanites
The Consumer – Amount Paid for Last Car
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- Key points
- Buyers prefer to pay the least possible when purchasing a car
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- Figure 61: Amount paid for last car, March 2013
- Healthy financial situation impacts on spend level
- Age of buyer also influences expenditure
- Men appear more likely to spend more on their car
The Consumer – Where was Your Last Car Purchased?
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- Key points
- Car dealers account for around half of sales
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- Figure 62: Where last car was purchased, March 2013
- Main dealers are especially important
- Car supermarkets are the leading ‘niche’ channel
- Older adults opt for dealers while younger buyers go private
- Wealthier buyers prefer main dealers
- Back to traditional channels?
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- Figure 63: Where last car was purchased, 2012 and 2013
- Main dealers are preferred for new cars
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- Figure 64: Where last car was bought, either new or second hand by car ownership, March 2013
- Increased spend equates with buying new
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- Figure 65: Car ownership, by cost of car purchasing, March 2013
The Consumer – The Purchasing Process
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- Key points
- Consumers have mixed views when it comes to car purchasing
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- Figure 66: Consumer attitudes towards car purchasing, March 2013
- Buying a car generates stark reactions from different buyers
- Economic difficulties welcomed by some
- Dealers have a role but replacement rates are currently low
- Men find process of car buying more attractive
- Londoners more likely to be confident
- Customer service important to older and rural buyers
- Young drivers and high earners regularly change their car
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- Figure 67: Consumer attitudes towards car purchasing, 2012 and 2013
- Dealers appear to offer comfort to buyers
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- Figure 68: Where last car was bought, either new or second hand, by most popular consumer attitudes towards car purchasing, March 2013
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- Figure 69: Where last car was bought, either new or second hand, by next most popular consumer attitudes towards car purchasing, March 2013
- Main dealers offer a number of positive benefits
- Other channels seem to lack these benefits
- Niche channels appeal to regular purchasers
The Consumer – Key Considerations When Car Buying
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- Key points
- Price dominates when it comes to purchasing a car
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- Figure 70: Considerations when buying a car whether new or second-hand, March 2013
- Direct and indirect costs are most important...
- ... followed by aesthetic factors
- Specific factors have only limited appeal
- Women are especially demanding
- Older groups are more demanding
- Few differences by socio-economic group
- Costs and brand are growing in importance for many buyers
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- Figure 71: Considerations when buying a car, 2011-13
- Price also dominates amongst leading factors
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- Figure 72: Factors important when buying a car, March 2013
- Price and reliability dominate as key factors
- Other factors much less important with the exception of safety
- For many it is a choice between reassurance or cost
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- Figure 73: Where last car was bought, either new or second hand, by most popular factors important when buying a car, March 2013
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- Figure 74: Where last car was bought, either new or second hand, by next most popular factors important when buying a car, March 2013
- Reassurance is important from main dealers, but less so with independents...
- ... while private buyers are much less demanding
The Consumer – Attitudes Towards Car Purchasing
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- Key points
- Shopping around for a deal is important to many
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- Figure 75: Agreement with statements related to buying a car, March 2013
- Potential buyers are likely to want to shop around for their next car
- Internet remains a search-focused tool
- Part-exchange important for around a half of potential buyers
- New cars seen as offering better value
- Electric cars have a good potential market
- Dealer test drives at home have limited appeal
- Shopping around has universal importance
- Older buyers likely to be choosy while younger drivers focus on value
- Wealthier socio-economic groups have strong attitudes to a variety of factors
- Environmental issues important to Londoners and those on high incomes
- Main dealers are well placed for future purchases
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- Figure 76: Where last car was bought, either new or second hand by most popular consumer attitudes towards buying your car, March 2013
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- Figure 77: Where last car was bought, either new or second hand by next most popular consumer attitudes towards buying your car, March 2013
- Past users of main dealers would return for a variety of reasons
- Independent dealer strengths rest with offering value
- Those going private have more specific needs
Appendix – Brand Research
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- Figure 78: Brand usage, February 2013
- Figure 79: Brand commitment, February 2013
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- Figure 80: Brand momentum, February 2013
- Figure 81: Brand diversity, February 2013
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- Figure 82: Brand satisfaction, February 2013
- Figure 83: Brand recommendation, February 2013
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- Figure 84: Brand attitude, February 2013
- Figure 85: Brand image – Macro image, February 2013
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- Figure 86: Brand image – micro image, February 2013
- Figure 87: Profile of target groups, by demographics, February 2013
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- Figure 88: Psychographic segmentation, by target groups, February 2013
- Figure 89: Brand usage, by target groups, February 2013
- Brand index
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- Figure 90: Brand index, February 2013
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Appendix – The Consumer: Car Ownership
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- Figure 91: Most popular car ownership, by demographics, March 2013
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- Figure 92: Next most popular car ownership, by demographics, March 2013
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Appendix – Consumer: Amount Spent on Last Car Purchased
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- Figure 93: Cost of car purchasing, by demographics, March 2013
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Appendix – Consumer: Where was Your Last Car Purchased?
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- Figure 94: Where last car was bought, either new or second hand, by demographics, March 2013
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Appendix – The Consumer: The Purchasing Process
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- Figure 95: Most popular consumer attitudes towards car purchasing, by demographics, March 2013
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- Figure 96: Next most popular consumer attitudes towards car purchasing, by demographics, March 2013
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Appendix – The Consumer: Key Considerations When Buying a Car
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- Figure 97: Most popular factors important when buying a car, by demographics, March 2013
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- Figure 98: Next most popular factors important when buying a car, by demographics, March 2013
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Appendix – Consumer: Attitudes Towards Car Purchasing
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- Figure 99: Most popular consumer attitudes towards buying your car, by demographics, March 2013
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- Figure 100: Next most popular consumer attitudes towards buying your car, by demographics, March 2013
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