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 purchases surpass 10.5 million units in 2016
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- Figure 1: UK new and used car sales, by volume, 2011-21
- Used car sales dominate the market
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- Figure 2: New and used car market volumes, 2011-16
- Recent popularity of diesel appears to have peaked
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- Figure 3: Sales of cars, by fuel type, 2011-16
- Dealers are growing their share of the overall market…
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- Figure 4: Change in share of new and used car volumes, by channel, 2013-16
- Companies and brands
- Mixed fortunes for car manufacturers
- Manufacturers and distributors invest in online as a sales channel
- Advertising expenditure expands
- The consumer
- Car owners are in the majority
- Nearly half of all cars were purchased in the last two years
- More than half of adults plan to buy a car in the next three years
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- Figure 5: Intention to purchase a car in the next 3 years, February 2017
- Less than half of those planning to purchase expect to do so in the coming 12 months
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- Figure 6: Strongest intentions to purchase a car in the next 3 years, February 2017
- New cars are preferred over used
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- Figure 7: Likelihood of new or used purchase, February 2017
- Savings and part exchange are the most popular methods of paying for a car
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- Figure 8: Methods of payment for next car, February 2017
- A minority of buyers are interested in buying online
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- Figure 9: Likelihood of buying next car online, February 2017
- Independent and dealer websites dominate for online purchasing
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- Figure 10: Preferred internet, February 2017
- Petrol leads as the preferred fuel for future car purchasers
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- Figure 11: Preference for future fuel types, February 2017
- Diesel emission testing scandal records high awareness
- What we think
Issues and Insights
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- Have car sales reached a peak?
- The facts
- The implications
- Diesel sales appear to be in reverse
- The facts
- The implications
- Recent investment in online sales may finally signal growth for this channel
- The facts
- The implications
The Market – What You Need to Know
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- Car sales surpass 10 million in 2016
- Financial factors are a major factor behind stronger sales
- Used car sales dominate the market
- The dominance of diesel would appear to be at an end
- Dealers dominate new and used car sales
- Rising costs and competition from other forms of transport remain a threat
Market Size and Forecast
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- Car purchases breach 10 million units per year for the first time in 2016
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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
- UK car market is 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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- Used cars continue to remain popular with purchasers
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- Figure 16: New and used car market volumes, 2011-16
- South East accounts for a fifth of new car registrations
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- Figure 17: New car registrations by region, 2011-15
- Private sales of new cars show signs of stagnation
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- Figure 18: UK new registrations of motor vehicles, 2011-16
- Company car purchases dominate but are in decline
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- Figure 19: New car registrations by keeper, 2011-15
- Dual and multipurpose vehicles benefit from increased interest
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- Figure 20: New car registrations, by broad segment, 2011-16
- Private buyers switching to lower medium and dual purpose cars
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- Figure 21: Share of vehicle types amongst private purchasers, 2011-16
- Popularity of diesel suffers…
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- Figure 22: Sales of new cars by fuel type, 2011-16
- …as interest in purchasing AFVs grows
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- Figure 23: Hybrid and electric new car registrations (Great Britain), by volume*, 2011-21
Channels to Market
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- Dealers are growing their share of the overall market…
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- Figure 24: Sales of new and used car volumes, by channel, 2013-16
- …as well as the used car market
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- Figure 25: Sales of new and used car volumes, by channel, 2013-16
- Number of dealer outlets record stability
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- Figure 26: Number of UK franchised dealer outlets, 2000-17
- Most major manufacturers have rationalised their site portfolio
- Major names dominate the franchised dealer market
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- Figure 27: Top 10 main dealership groups in the UK, by turnover 2013-15
- Independent sector dominated by car supermarkets
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- Figure 28: Top 10 independent dealership groups in the UK, by turnover, 2015
- Renewed interest in the internet
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- Figure 29: new dedicated manufacturer online portals (UK) since mid-2016
Market Drivers
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- Consumer confidence continues to increase
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- Figure 30: Mintel’s well-being index, February 2009-January 2017
- Loan rates remain low…
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- Figure 31: Monthly percentage values of selected interest rates, January 2008-February 2017
- …and help to boost consumer lending for car purchases
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- Figure 32: Value of advances (£mn) on sales of all cars bought on finance by consumers through dealerships, 2011-16
- Low levels of inflation assisting car buyers
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- Figure 33: Annual change in CPI, 2005-16
- Insurance costs are on the way up
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- Figure 34: Average premium for comprehensive car insurance policies, 2012-16
- Increased use of public transport
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- Figure 35: Public transport passenger journeys (Great Britain), 2004/15-2015/16
- Number of taxi and private hire licences is growing
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- Figure 36: Total licensed taxi and private hire vehicles (England and Wales), 2005-15
- Car rental continues as a direct alternative to purchasing…
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- Figure 37: Size of fleet and Number of rentals, 2010-16
- …while car club membership approaches a quarter of a million
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- Figure 38: Car club vehicle and membership growth, June 2008-November 2016
Companies and Brands – What You Need to Know
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- Mixed fortunes for car manufacturers…
- ...and for established models
- Dealers address customer experience
- Online receives increased interest as a sales channel
- Advertising expenditure expands
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 39: Manufacturer shares of new car registrations, 2010, 2012, 2014 and 2016
- Fragmentation increasingly evident when it comes to model share
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- Figure 40: Top 10 new car models, 2014-16
- Key Ford, Vauxhall and Volkswagen models dominate used car market
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- Figure 41: Top 10 used car models, 2016
Competitive Strategies
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- Moving with the market
- Acquisition for growth
- Focusing in on customer experience
- New ways to reach customers
Launch Activity and Innovation
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- Online activity accelerates
- Citroën pledges to fix its prices
- SEAT looks at greater involvement with potential buyers
- Tinder-like app that makes online car shopping simpler
Advertising and Marketing Activity
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- Expenditure up overall since 2012 albeit with slowdown since 2015
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- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, 2012-16
- Webuyanycar dominates a market that is slowly consolidating
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- Figure 43: Leading UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2012-16
- Old media gives way to new
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- Figure 44: UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2012-16
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Car ownership has grown to stand at 71% of the adult population
- 44% of car owners purchased their vehicle in the last two years
- Over half of adults expect to buy a car in the coming three years
- Interest in buying a new car has grown recently
- Savings and part exchange are the most popular ways of buying a car
- Online remains a niche channel although interest is higher amongst certain groups
- Petrol is the preferred fuel amongst car buyers
- Two thirds of adults are aware of the diesel emission testing scandal
Car Ownership
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- Car owners are in the majority
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- Figure 45: Car ownership, February 2017
- Some adults more than others are likely to own a car
- Car ownership climbs between 2015 and 2017
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- Figure 46: Car ownership, 2015-17
- A sizeable percentage of cars have been purchased in the last two years
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- Figure 47: Statements about car ownership, February 2017
- Regional splits evident
- Young adults are important buyers
- Women show a growing interest in buying new
- Rising new car sales impact on this section of the market
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- Figure 48: Car ownership, 2015-17
- Most adults without a car cannot drive
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- Figure 49: Statements about those not owning a car, February 2017
- Age, household size and location are some of the factors affecting those without a car
Car Purchasing Intentions
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- Over half of adults plan to buy a car in the next three years
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- Figure 50: Intention to purchase a car in the next 3 years, February 2017
- Wealth plays a major factor
- Full-time employed are key market
- Lifestyle changes are important driver
- Owners of new cars are more likely to purchase again in the next 3 years
- Purchase intentions appear to be weakening…
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- Figure 51: Intention of purchasing a car/s in the next three years, 2015-17
- …with less than half of those planning to purchase expecting to do so in the coming 12 months
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- Figure 52: Strongest intentions to purchase a car in the next 3 years, February 2017
- Income and socio economic status have a big impact on purchasing intentions
- Young adults appear less certain about purchasing
- Families are important buyers in the coming six months
- Cycle of replacement may explain purchasing plans for owners of new and used cars
- Stability evident when it comes to purchasing intentions over the coming 3 years
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- Figure 53: Intention of purchasing a car/s in the next three years, 2015-17
- Nearly half plan to buy new in the coming 3 years
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- Figure 54: Likelihood of new or used purchase, February 2017
- Income is a major determinant of buying new
- Owners of new cars are more likely to purchase another new car
- Buying new records a sizeable increase in popularity since 2015
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- Figure 55: Intention of purchasing a car/s in the next three years, 2015-17
Methods of Payment
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- Savings and part exchange with an existing vehicle are popular methods of payment
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- Figure 56: Methods of payment for next car, February 2017
- Finance popular with wealthy and middle-aged adults
- Savings are important to older adults as well as those that are wealthy
- Innovative methods of ownership popular with new car buyers
- Use of innovative methods of payment appear to be growing in popularity
- Income is a major factor in encouraging interest in other methods of payment
Interest in Online Purchasing
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- Cautious interest in buying a car online
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- Figure 57: Likelihood of buying next car online, February 2017
- Certain groups are more likely to favour online…
- …with families having an especially strong interest
- Online is of greatest interest to owners and buyers of new cars who expect to purchase in the next three years
- Independent and dealer websites dominate for online purchasing
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- Figure 58: Preferred internet channel for future car purchase, February 2017
Interest in Fuel Types
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- Petrol dominates for potential car buyers
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- Figure 59: Preference for future fuel types, February 2017
- Hybrids are the most popular non-fossil fuel power source
- Older adults appear wedded to petrol
- Popularity of diesel amongst those living in cities continues
- Parents and high earners are best target for alternative fuels
- Recent car buyers show preference towards diesel as well as hybrid technology to power their next vehicle…
- …yet for the wider market of future purchasers it is petrol that is preferred
- Older and wealthier adults appear especially flexible when it comes to fuel choices
- Petrol sees surge in popularity between 2016 and 2017
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- Figure 60: Preference for future fuel types, 2016-17
Awareness of Issues with Diesel Emission Testing
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- Majority of adults aware of the diesel emission testing scandal
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- Figure 61: Awareness of issues with diesel emission testing, February 2017
- Age and gender denote clear divisions in awareness
- Income also plays a big part in awareness
- Those most likely to purchase a car record highest awareness of scandal
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Exclusions
- Market sizing and segment performance
- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- New and used car sales
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- Figure 62: New and used car market volumes, 2011-21
- Fan chart forecast
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