Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Car sales reach all time high
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- Figure 1: UK new and used car sales, by volume, 2011-21
- Smaller format cars account for over a third of new sales
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- Figure 2: New car registrations by broad segment (share), 2016
- Cars are the preferred mode of transport for many
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- Figure 3: Mode share (average distance travelled), England, 2015
- Companies, brands and innovation
- A highly fragmented market
- German brands are strongly differentiated from others in the market
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- Figure 4: Attitudes towards and usage of selected brands, January 2017
- Investment in advertising remains largely stable
- Innovation for all
- The consumer
- Most adults own a car
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- Figure 5: Car ownership, November 2016
- New and used cars are both popular
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- Figure 6: Age of car owned, November 2016
- Most adults who don’t own a car also don’t have access to one either
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- Figure 7: Non car ownership, November 2016
- Small and medium-sized vehicles dominate the market
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- Figure 8: Type of car owned, November 2016
- Petrol is the most popular fuel for cars
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- Figure 9: Fuel used with main car, November 2016
- Commuting is a key use for a car
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- Figure 10: Reasons for using a car, November 2016
- Improvements to current technology is more important than the introduction of new technology
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- Figure 11: Future demands from suppliers, November 2016
- What we think
Issues and Insights
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- New car sales suffer from slowdown in expansion
- The facts
- The implications
- What future for diesel?
- The facts
- The implications
- Can growth in hybrid and electric cars be maintained?
- The facts
- The implications
The Market – What You Need to Know
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- 2016 sees car sales of 10 million+ for the first time
- New car sales have been the stronger segment recently
- Smaller and more versatile vehicles are proving popular with buyers
- Franchised dealers dominate sales channels
- Growing car sales fail to raise car ownership
- Cars dominate over other transport alternatives
Market Size and Forecast
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- Car sales surpass 10 million per year for the first time
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- Figure 12: UK new and used car sales, by volume, 2011-21
- Figure 13: Best- and worst-case forecasts for UK new and used sales, 2011-21
- Forecast methodology
- The impact of the EU referendum vote
- Market performing better than could have been expected
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- Figure 14: Alternative market scenarios for the post-Brexit car market, at current prices, 2016-21
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- Figure 15: Detailed post-Brexit scenarios for UK new and used car sales, at current prices, 2016-21
- Wider demand for vehicles is set to soften after a period of expansion
Market Segmentation
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- New car sales continue their upward trend
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- Figure 16: New and used car market volumes, 2011-16
- Car parc expansion is also being accompanied by car parc ageing
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- Figure 17: Age structure of the car parc in years, 2011-15
- Dual and multipurpose vehicles benefit from increased interest
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- Figure 18: New car registrations, by broad segment, 2011-16
- … although it is mini/supermini and lower and upper medium that continue to dominate
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- Figure 19: New car registrations by broad segment (share), 2011-16
- Interest in smaller and more versatile vehicles is evident from buyers
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- Figure 20: New car registrations by category, 2005, 2010 and 2015
- Popularity of diesel appears to stall
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- Figure 21: Sales of cars by fuel type, 2011-16
Channels to Market
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- Franchised dealers account for nearly half of all sales
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- Figure 22: Sales of new and used cars, by channel, 2013-15
Market Drivers
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- Mixed messages when it comes to the affordability of motoring
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- Figure 23: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2011-15
- Little evidence that growing car sales are increasing car ownership
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- Figure 24: Percentage of households with car availability, in England, 2005-15
- Number of trips being taken is in decline
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- Figure 25: Trips, distance travelled and time taken, 2005-15
- Cars still dominate when compared to other transport options
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- Figure 26: Mode share (average distance travelled), England, 2015
- Cars favoured most for commuting and shopping…
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- Figure 27: Importance of transport types by specific reasons for travelling (England), 2014
- … as well as by a cross section of adults
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- Figure 28: Mode share (average distance travelled), England, 2015
- Over half of adults plan to buy a car in the next three years …
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- Figure 29: Do you or someone else in your household plan to buy a car(s) within the next 3 years, February 2016
- … although there is no obvious preference towards buying new or used
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- Figure 30: Intention of purchasing a car/s in the next three years, by new or second-hand purchase, February 2016
- Hybrid and electric cars set to play a greater part in the market
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- Figure 31: Hybrid and electric new car registrations (Great Britain), by volume*, 2011-21
- Number of larger households continues to increase
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- Figure 32: Changes in single and multi-person households, 2006-15
- UK population both growing and ageing
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- Figure 33: Trends in the age structure of the UK population, 2011-21
Companies and Brands – What You Need to Know
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- Established manufacturers see market share fall back
- Smaller models remain popular with buyers
- Innovation addressing all aspects of driving
- Advertising expenditure is growing although directed towards particular types of car
- Not all brands perceived the same
Market Share
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- Ford, Vauxhall and Volkswagen suffer a reversal in their fortunes
- Premium marques continue to make ground as consumers trade up
- Value brands are also growing in popularity illustrative of further polarisation
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- Figure 34: Manufacturer shares of new car registrations, 2010, 2012, 2014 and 2016
- Performance of Nissan, Land Rover, Jaguar and MINI illustrates good performance for UK producers
- Smaller models dominate sales
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- Figure 35: Top 10 car models, 2016
Launch Activity and Innovation
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- Hyundai looks at multiple power trains for its Ioniq model
- Autodrive offering support for autonomous driving
- Volvo combines safety with features
- Honda Sensing offers new level of driver awareness
- Gesture control beginning to take off
- Ford partners with Amazon’s Alexa
Advertising and Marketing Activity
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- Promotional expenditure on an upward trajectory
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- Figure 36: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2012-16
- Family cars and 4x4 categories dominate activity
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- Figure 37: Recorded above-the-line, online display and direct mail total advertising expenditure, by type of car, 2012-16
- Advertising expenditure closely mirrors market position
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- Figure 38: Recorded above-the-line, online display and direct mail total advertising expenditure by leading car manufacturers, 2012-16
- Television advertising is the clear winner as other channels suffer from mixed fortunes
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- Figure 39: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2012-16
- Nielsen Ad Intel coverage
Brand Research
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- Most German brands are performing well
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- Figure 40: Attitudes towards and usage of selected brands, January 2017
- Key brand metrics
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- Figure 41: Key metrics for selected brands, January 2017
- Brand attitudes: German brands are positioned well against quality
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- Figure 42: Attitudes, by brand, January 2017
- Brand personality: Volkswagen continues to be associated as being unethical
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- Figure 43: Brand personality – Macro image, January 2017
- Reliability differentiates many mass-market brands
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- Figure 44: Brand personality – Micro image, January 2017
The Consumer – What You Need to Know
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- A majority of adults own a car
- Car ownership can be broadly split between new and used vehicles
- Small and medium-sized vehicles are popular
- Petrol is the most popular fuel
- Commuting and shopping dominate key uses for a car
- Drivers are looking for improvements rather than innovation
Car Ownership
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- 7 out of 10 adults currently own a car
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- Figure 45: Car ownership, November 2016
- Wealth, gender and location are some of the factors that influence car ownership
- Despite variations in ownership, the percentage of adults with a car is growing
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- Figure 46: Car ownership, 2014-16
Age of Car Owned
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- Broad spread of car owned by age
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- Figure 47: Age of car owned, November 2016
- Older adults prefer owning used
- Income is a major factor affecting choice
- Londoners have a preference for buying new
- Rising new car sales boost profile of those with a vehicle purchased new within the last 2 years
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- Figure 48: Age of car owned, 2014-2016
Non Car Ownership
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- Most non car owners don’t have access to any vehicle
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- Figure 49: Non car ownership, November 2016
- Young adults benefit in more affluent households
Type of Car Owned
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- Small and medium-sized vehicles are most popular with car owners
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- Figure 50: Type of car owned, November 2016
- Small cars popular with young adults
- London – A market for compact and luxury cars
- SUVs attract older, rural and wealthier owners
- Compact cars are more likely to have been purchased in the last two years
- Medium saloon/hatchbacks make progress when it comes to ownership
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- Figure 51: Car ownership, 2014 and 2016
Fuels Used with Main Car
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- Majority of cars owned are powered by petrol
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- Figure 52: Fuel used with main car, November 2016
- Older adults have a preference for diesels
- Use of petrol and diesel appears linked with location
- London records the strongest penetration of hybrids
- New car buyers appear to have switched towards diesel
- Diesel is popular with larger cars
Reasons for Using a Car
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- Commuting is the main reason for using a car
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- Figure 53: Reasons for using a car, November 2016
- Older adults find different uses for their cars
- Shopping dominates for less affluent, commuting for most affluent
Future Demands from Suppliers
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- Improvements to existing engines dominate over other demands
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- Figure 54: Future demands from suppliers, November 2016
- Technical and environmental improvements are popular with young adults and those with children
- Men are interested in alternative power sources
- Those living in London are keen on vehicle features
- Presence of children drives interest in particular vehicle features
- Owners of older, used, cars show least interest in improvements
- Owners of compact cars exhibit strong environmental demands
- Diesel owners seem more demanding than those with petrol vehicles
- CHAID analysis
- Methodology
- Wealthy, urban adults hold good prospects for connectivity enhancements
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- Figure 55: UK Car Review – CHAID – Tree output, November 2016
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- Figure 56: UK Car Review – CHAID – Table output, November 2016
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Exclusions
- Market sizing and segment performance
- Fan Chart Forecast
- Abbreviations
- Consumer research methodology
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