Table of Contents
Executive Summary
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- The market
- New car sales accelerate
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- Figure 1: UK new car sales, 2008-18
- Small and specialist
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- Figure 2: Share of vehicle types amongst private purchasers, 2010-13
- Strong level of future purchasing intent
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- Figure 3: Future purchasing intentions in the next 3 years, February 2014
- Costs of ownership and competition from other transport options cannot be overlooked
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- Figure 4: Used car market volume, 2008-13
- Companies, brands and innovation
- Manufacturer market share in flux
- Dealers dominate for car sales
- The consumer
- Over half of cars in ownership purchased more than two years ago
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- Figure 5: Statements about car ownership, February 2014
- £15,000 is the upper ceiling band for most purchases
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- Figure 6: Amount paid for last car, February 2014
- Majority of purchases are from dealers
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- Figure 7: Where last car was purchased, February 2014
- Strong future purchasing intentions
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- Figure 8: Intention on purchasing a car/s in the next 3 years, February 2014
- Price and reliability lead as key factors when purchasing
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- Figure 9: Primary importance of five key factors when purchasing a car, February 2014
- Searching is an important part of the purchasing process
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- Figure 10: Agreement with statements related to buying a car, February 2014
- What we think
Issues and Insights
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- New cars will continue to face a challenge from used
- The facts
- The implications
- Market fragmentation is a reality
- The facts
- The implications
- Dealers remain a safe bet for many
- The facts
- The implications
Trend Application
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- Trend: Minimise Me
- Trend: The Nouveau Poor
- Trend: Green and Lean
Market Environment
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- Key points
- UK economy and consumers both show signs of recovery...
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- Figure 11: GDP, PDI, consumer expenditure and savings, at current prices, 2008-18
- GDP growth will take time to strengthen
- Consumer expenditure set to expand faster
- ... with quarterly GDP performance further illustrating this
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- Figure 12: GDP quarterly percentage change, Q1 2006-Q32013
- Financial confidence begins to strengthen
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- Figure 13: Household financial situation index, February 2009-November 2013
- Net lending for car purchases sees strong growth
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- Figure 14: Value of advances (£m) on sales of all cars bought on finance by consumers through dealerships, 2009-13
- Majority of adults own a car...
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- Figure 15: Ownership of cars February 2014
- ... although older cars dominate the market
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- Figure 16: Ownership of cars, by when purchased, February 2014
- Over half of adults are likely to purchase a car in the next 3 years
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- Figure 17: Future purchasing intentions in the next 3 years, February 2014
- Near equal interest in new and used cars
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- Figure 18: Type of car expected to be purchased, February 2014
- Falling price of used cars remains a concern for new car market
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- Figure 19: Price indices of new and used cars, 1996-2012
- Pain of high fuel prices may be easing
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- Figure 20: Monthly UK petrol, diesel and oil price trends, 2009-13**
- Growth in the number of households set to boost demand for personal transport
- UK population moving socially downward
- An ageing population
Competitive Context
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- Key points
- Car ownership costs keep rising
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- Figure 21: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2009-12
- Competing demands when it comes to overall expenditure
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- Figure 22: Consumer expenditure, by sector (£billion), 2012
- Used car sales outperform new car sales
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- Figure 23: Used car market volume, 2008-13
- Alternatives to car ownership represent an emerging threat
Who’s Innovating?
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- Key points
- Showroom innovation
- Online car and service store
- Engaging the youth in the electric movement
- VW taps into geo-location
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Market Size and Forecast
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- Key points
- New car sales return to pre-recessionary levels
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- Figure 24: UK new registrations of motor vehicles, 2008-14
- Private sales show upward surge
- Business and fleet sales record less variability
- Forecast
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- Figure 25: UK new car sales, 2008-18
Segment Performance
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- Key points
- Small and dual purpose vehicles register strongest growth
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- Figure 26: Sales of cars* by type, mini and medium size cars, 2008-13
- Figure 27: Sales of cars* by type, other cars, 2008-13
- Buyers think small…
- New vehicle designs proving especially popular
- … as larger models suffer
- Trading up benefits executive sector
- Smaller cars prove especially popular with private motorists
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- Figure 28: Sales of new vehicles, % share by purchaser type, 2013
- Half of all private buyers opt for vehicles in mini or supermini category
- Fleet and business buyers record a much broader interest
- Private market showing polarisation
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- Figure 29: Share of vehicle types amongst private purchasers, 2010-13
- Shift down in terms of size
- Growth in demand for dual and multipurpose vehicles
- Diesels leads over petrol and AFVs
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- Figure 30: Sales of cars* by fuel, 2008-13
- Diesels continue to hold around a half of all sales
- Petrol sector shows small recovery
- AFVs fail to make progress
- Petrol/electric hybrids dominate AFV market
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- Figure 31: Electric, hybrid and AFV sales*, 2010 -13
Market Share
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- Key points
- Fragmentation of market continues as established manufacturers face new challenges
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- Figure 32: Manufacturer shares of new car registrations, 2010-13
- Ford and Vauxhall experience different fortunes
- Premium German marques make big strides...
- ... as some mass market manufacturers suffer
- Value brands making good progress
Brand Communication and Promotion
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- Key point
- Promotional expenditure largely unchanged
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- Figure 33: Topline advertising spend in the car market, 2010-13
- Established names in the market up their investment
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- Figure 34: Top 20 car manufacturers, by advertising expenditure, 2010-13
- Manufacturer expenditure by individual ranges
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- Figure 35: Top manufacturer model lines , by advertising expenditure, 2013
- Television has increased its profile
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- Figure 36: Share of manufacturers advertising expenditure, by channel, 2010-13
- Investment by dealers is largely fragmented
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- Figure 37: Top 20 Car dealerships, by advertising expenditure, 2010-13
- Radio dominates for dealers with direct mail also important
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- Figure 38: Share of dealer advertising expenditure, by channel, 2010-13
Brand Research
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- Brand map
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- Figure 39: Attitudes towards and usage of brands in the car sector, February 2014
- Correspondence analysis
- Brand attitudes
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- Figure 40: Attitudes, by car brand, February 2014
- Brand personality
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- Figure 41: Car brand personality – macro image, February 2014
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- Figure 42: Car brand personality – micro image, February 2014
- Brand experience
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- Figure 43: Car brand usage, February 2014
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- Figure 44: Satisfaction with various car brands, February 2014
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- Figure 45: Consideration of car brands, February 2014
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- Figure 46: Consumer perceptions of current car brand performance, February 2014
- Brand recommendation
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- Figure 47: Recommendation of various car brands, February 2014
Channels to Market
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- Key points
- Franchised dealer network stabilises after recent falls
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- Figure 48: Number of UK franchised dealer outlets, 2000-13
- Multi-site operators dominate the market
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- Figure 49: Top ten main dealership groups in the UK, by turnover, 2013
- Independent market represents a more fragmented sector
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- Figure 50: Top ten independent dealership groups in the UK, by turnover and unit sales, 2013
- The internet remains a minor tool for purchasing...
- ... with greater importance attached to its use in search
The Consumer – Car Ownership
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- Key points
- Majority of cars owned were purchased more than 2 years ago
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- Figure 51: Statements about car ownership, February 2014
- Young adults most likely to own a used car
- Income and socio-economic status have strong impact on type of car owned
- Londoners most likely to own a new car
- Those without access to a car are also likely not to hold a driving licence
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- Figure 52: Statements about car ownership, February 2014
The Consumer – Amount Paid For Last Car
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- Key points
- Buyers can be found at all price points
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- Figure 53: Amount paid for last car, February2014
- Majority of purchasers spend up to £15,000 on a car
- Income plays a big part in the amount spent…
- … as does socio-economic status
- Men and older adults are also likely to spend more
- Economic slowdown may have impacted on price paid for used cars
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- Figure 54: Price paid for last car purchased, by statements about car ownership and driving, February 2014
- Shift towards lower price used cars is evident…
- … yet this does not appear the case for those buying new
The Consumer – Where Was Your Last Car Purchased?
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- Key points
- Traditional retail channels are most important when buying a car
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- Figure 55: Where last car was purchased, February 2014
- Around three quarters of sales through dealers
- Private sellers lead over other channels
- Different age groups have different preferences…
- … with this possibly related to finance
- Urbanites have greater choice for purchasing
- Large families look for something different
- Main dealers dominate market with independent dealers a strong second
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- Figure 56: Where last car was purchased, March 2012, March 2013 and February 2014
- Dealers dominate when it comes to spending more on a car
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- Figure 57: Where was your last car purchased, by price paid for last car purchased, February 2014
- Over half of those spending £7,500 or more buy from a main dealer
- Other outlets tend to deal with cheaper cars
- Dealers stake out new market, independents and private sellers the used market
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- Figure 58: Where was your last car purchased, by statements about car ownership, February 2014
The Consumer – Timescale for Future Car Purchasing
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- Key points
- Over half of all adults plan to purchase a car within three years
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- Figure 59: Intention on purchasing a car/s in the next 3 years, February 2014
- Certain groups should be viewed as important prospects
- Half of all purchasers buying in the next three years plan to buy soon
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- Figure 60: Timeframe for future car purchase, February 2014
- Younger adults appear interested in buying sooner
- Urban buyers most eager to purchase
- Income, not surprisingly, also has an influence on purchase timeframe
- New and used cars record equal preference
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- Figure 61: New or second hand purchase, February 2014
- Age appears to play an important part in the purchase decision
- Groups planning to buy new are also those most likely to purchase in the next three years
- New cars set to feel the benefit of short-term purchasing plans
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- Figure 62: New or second hand purchase, by timeframe for future car purchase, February 2014
The Consumer – Factors Important When Purchasing
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- Key points
- Price is key when purchasing
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- Figure 63: Importance of factors when purchasing a car, February 2014
- … although reliability registers broader importance overall
- Different groups prioritise different factors
- Factors associated with car use are also important
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- Figure 64: Importance of other factors when purchasing a car, February 2014
- Men and women looking for different things
- Older adults are typically more demanding
- Higher earners focus on comfort, design and quality
The Consumer – Statements Associated with Car Purchasing
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- Key points
- Searching is an important part of the purchase process
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- Figure 65: Agreement with statements related to buying a car, February 2014
- Shopping around is especially important
- Flexibility and support is sought when purchasing
- The internet remains a niche channel
- Hybrids are favoured over electric vehicles
- Older adults seek out particular factors when it comes to purchasing
- Rural purchasers are more opinionated
- Londoners – only interested in specific factors
- Attitudes towards purchasing vary between those buying new and used
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- Figure 66: Attitudes towards car purchasing, by new or second hand purchase, February 2014
Appendix – Market Environment
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- Figure 67: Ownership of a car, by demographics, February 2014
- Figure 68: UK households, by size, 2008-18
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- Figure 69: Forecast adult population trends, by socio-economic group, 2008-18
- Figure 70: Trends in the age structure of the UK population, 2008-18
- Figure 71: Trends in the age structure of the UK population, 2008-18
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Appendix – Brand Research
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- Figure 72: Brand usage, February 2014
- Figure 73: Brand commitment, February 2014
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- Figure 74: Brand momentum, February 2014
- Figure 75: Brand diversity, February 2014
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- Figure 76: Brand satisfaction, February 2014
- Figure 77: Brand recommendation, February 2014
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- Figure 78: Brand attitude, February 2014
- Figure 79: Brand image – macro image, February 2014
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- Figure 80: Brand image – micro image, February 2014
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Appendix – The Consumer – Car Ownership
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- Figure 81: Statements about car ownership and driving, by demographics, February 2014
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- Figure 82: Reasons for not owning a car, by demographics, February 2014
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Appendix – The Consumer – Amount Paid For Last Car
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- Figure 83: Most popular price paid for last car purchased, by demographics, February 2014
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- Figure 84: Next most popular price paid for last car purchased, by demographics, February 2014
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Appendix – The Consumer – Where Was Your Last Car Purchased?
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- Figure 85: Most popular where was your last car purchased, by demographics, February 2014
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Appendix – The Consumer – Timescale for Future Car Purchasing
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- Figure 86: Intention on purchasing a car/s in the next 3 years, by demographics, February 2014
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- Figure 87: New or second hand purchase, by demographics, February 2014
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- Figure 88: Timeframe for future car purchase, by demographics, February 2014
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Appendix – The Consumer – Factors Important When Purchasing
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- Figure 89: Importance of factors when purchasing a car – Price, by demographics, February 2014
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- Figure 90: Importance of factors when purchasing a car – Reliability, by demographics, February 2014
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- Figure 91: Importance of factors when purchasing a car – Low fuel consumption, by demographics, February 2014
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- Figure 92: Importance of factors when purchasing a car – Safety, by demographics, February 2014
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- Figure 93: Importance of factors when purchasing a car – Brand, by demographics, February 2014
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- Figure 94: Most popular importance of other factors when purchasing a car, by demographics, February 2014
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- Figure 95: Next most popular importance of other factors when purchasing a car, by demographics, February 2014
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Appendix – The Consumer – Statements Associated with Car Purchasing
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- Figure 96: Most popular attitudes towards car purchasing, by demographics, February 2014
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- Figure 97: Next most popular attitudes towards car purchasing, by demographics, February 2014
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- Figure 98: Other attitudes towards car purchasing, by demographics, February 2014
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