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 soften in 2017 after peaking in 2016
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- Figure 1: UK new and used car sales, by volume, 2012-22
- Used cars dominate the market
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- Figure 2: New and used car sales, by volume, 2012-17
- Demand for diesel falls as negative publicity grows
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- Figure 3: Sales of new cars, by fuel type, 2012-17
- Franchised dealers account for over half of all sales
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- Figure 4: New and used car volumes, by channel, 2017
- Companies and brands
- Premium brands are proving popular with buyers
- Highly competitive market where acquisitions are an important feature
- Advertising expenditure expands
- The consumer
- 70% of adults own a car
- Similar percentage of adults have bought new and used cars
- Main dealers are the most important sales channel
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- Figure 5: Where last car was purchased, December 2017
- Over half of adults plan to buy a car in the next three years…
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- Figure 6: Intention to purchase a car in the next three years, December 2017
- …with the coming 12 months especially significant
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- Figure 7: Timescale for purchasing a car in the next three years, December 2017
- New cars dominate planned purchases
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- Figure 8: Likelihood of new or used purchase, December 2017
- Petrol is the preferred fuel choice when purchasing a car with hybrid technology second
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- Figure 9: Preference for future fuel types, December 2017
- Technology to assist parking a car is popular
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- Figure 10: Innovations sought by buyers, December 2017
- Savings and part-exchange of a car dominate as payment methods
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- Figure 11: Methods of payment for next car, December 2017
- What we think
Issues and Insights
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- Sellers set for challenging market conditions
- The facts
- The implications
- Demand for diesel plummets
- The facts
- The implications
- Young are selective towards technical innovations
- The facts
- The implications
The Market – What You Need to Know
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- Car sales fall back in 2017 after peaking in 2016
- Business and fleet sales perform stronger than the private market
- Diesel falls out of favour as a fuel
- Franchised dealers increasingly dominate market
- More and more consumers uncertain about their finances
- Alternatives to car ownership are proving popular
Market Size and Forecast
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- Sales peak in 2016 with a fall in purchases registered in 2017
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- Figure 12: UK new and used car sales, by volume, 2012-22
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- Figure 13: Forecast for UK new and used sales, 2012-22
- Forecast methodology
Market Segmentation
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- Used cars dominate sales
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- Figure 14: New and used car market volumes, 2012-17
- South East, South West and East all record an increase in share of sales
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- Figure 15: New car registrations, by region, United Kingdom, 2012-16
- Business and fleet sales performing the strongest
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- Figure 16: UK new registrations of motor vehicles, 2012-17
- Personal purchases by men and women are in decline
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- Figure 17: New car registrations by keeper, Great Britain, 2012-16
- Demand for dual and multipurpose vehicles grows…
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- Figure 18: New car registrations, by broad segment, 2012-17
- …from all sectors of the buying market
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- Figure 19: Share of vehicle types amongst private purchasers, 2012 and 2017
- Petrol dominates as diesel falls out of favour amongst buyers
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- Figure 20: Sales of new cars, by fuel type, 2012-17
Channels to Market
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- Franchised dealers benefit from recent buoyant new car sales
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- Figure 21: Sales of new and used cars, by channel, 2013-17
- Dealers see growth in their share of used car sales
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- Figure 22: Sales of new and used car volumes, by channel, 2013-17
- Dealer network continues to shrink
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- Figure 23: Number of UK franchised dealer outlets, 2008-18
- Strong new car sales boost franchised market
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- Figure 24: Top 10 main dealership groups in the UK, by turnover, 2016
- Independent sector dominated by car supermarkets
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- Figure 25: Top 10 independent dealership groups in the UK, by turnover, 2016/17
- Growing interest in alternative ways of retailing
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- Figure 26: Dedicated manufacturer online portals (UK), 2017
Market Drivers
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- Decline in those who view financial situation as healthy during 2017
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- Figure 27: Respondents who describe their financial situation as ‘healthy’, January 2016-September 2017
- Loan rates continue to be attractive…
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- Figure 28: Monthly percentage values of selected interest rates, January 2012-December 2017
- …helping to stimulate consumer lending
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- Figure 29: Value of advances (£m) on sales of all cars bought on finance by consumers through dealerships, 2012-17
- Inflationary pressures evident since 2015…
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- Figure 30: Annual change in CPI, Q1 2006-Q4 2017
- …impacting on motoring costs
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- Figure 31: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2012-16
- Cost of car insurance is also rising
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- Figure 32: Average premium for comprehensive car insurance policies, 2012-17
- Alternative ways of accessing a car are proving of interest
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- Figure 33: Alternatives to car ownership, 2015 and 2017
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- Figure 34: Car club vehicle and membership growth, 2008-17
- Taxi and private hire licences approach 300,000
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- Figure 35: Total licensed taxi and private hire vehicles (England and Wales), 2007-17
- Public transport is another challenger to car ownership
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- Figure 36: Public transport passenger journeys (Great Britain), 2006/07-2016/17
Companies and Brands – What You Need to Know
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- Premium brands are proving popular with buyers
- Acquisitions are an important way of competing in the market
- Sellers looking at different ways of attracting buyers
- Advertising expenditure shows steady increase
Market Share
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- Established players suffer as buyers look for something different
- Premium brands are proving attractive to buyers
- Brands that offer something different are also attractive to buyers
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- Figure 37: Manufacturer shares of new car registrations, 2011-17
- Fragmentation increasingly evident when it comes to model share
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- Figure 38: Leading new car models, 2014-17
- Traditional models still dominate used car sales
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- Figure 39: Leading used car models, 2016 and 2017
Competitive Strategies
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- Acquisitions are an important feature of the market
- Partnering to help strengthen brand presence
Launch Activity and Innovation
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- Škoda entices customers with Live Tour
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- Figure 40: Škoda live tour
- Growing interest in using retail sale environments
- PSA looks at cross-sectoral opportunities
Advertising and Marketing Activity
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- Expenditure up 29% between 2013 and 2017
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- Figure 41: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, 2013-17
- Investment is focused on the two annual numeric number plate changes
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- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, monthly share of annual expenditure, 2016 and 2017
- Webuyanycar.com dominates the market
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- Figure 43: Leading UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2013-17
- Radio and television dominate
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- Figure 44: UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2013-17
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Car ownership steady at 70% of adults
- Main dealers are the most important sales channel
- Over half of adults plan to buy a car in the coming three years
- Petrol is increasingly favoured over diesel
- Assistance with parking is popular with drivers
- Many buyers look to avoid debt
Car Ownership
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- Car ownership stands at 70%
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- Figure 45: Car ownership, December 2017
- Large families and income are key in influencing car ownership
- Car ownership appears to have stagnated since 2016
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- Figure 46: Car ownership, 2014-17
- Similar percentage of adults have bought new and used cars
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- Figure 47: Age of car owned, December 2017
- Affluence has a strong impact on ownership of new cars
- Age impacts on choice
- Men are important owners of new cars
- Londoners prefer to buy new
- As with ownership, new car purchases within the last two years have also stalled
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- Figure 48: Age of car owned, 2014-17
- Most non-car owners don’t drive
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- Figure 49: Non-car ownership, December 2017
- Age, gender and affluence are all associated with not owning a car
Where Last Car Was Purchased
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- Main dealers dominate recent purchases
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- Figure 50: Where last car was purchased, December 2017
- Young and old have different preferences
- Income and socio-economic status differentiate those using a main dealer
- Online popular with young women
- Current owners of new cars are also likely to be future new car owners
- Main dealers increasingly dominate as private sales fall back
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- Figure 51: Where last car was purchased, 2012-17
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 52: Intention to purchase a car in the next three years, December 2017
- Young adults and men are key markets
- Socio-economic status also strong indicator of purchasing intentions
- Families are key buyers
- New car owners more likely to be future buyers
- Stagnation evident when it comes to future purchase intentions
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- Figure 53: Intention of purchasing a car/s in the next three years, 2015-17
- For those planning to purchase the next year will be significant
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- Figure 54: Timescale for purchasing a car in the next three years, December 2017
- Young adults are more likely to buy sooner rather than later
- Rural buyers look like they will wait
- Recent new car purchasers are key purchasers
- Surge in planned purchases during the coming 12 months
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- Figure 55: Timescale for purchasing a car in the next three years, 2015-17
- New cars dominate planned purchases
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- Figure 56: Likelihood of new or used purchase, December 2017
- Women remain focused on used or are undecided
- Younger adults are more likely to buy used
- Current car owners are more likely to buy new
- Interest in buying a new car continues to grow
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- Figure 57: Intention of purchasing a car/s in the next three years, 2015-17
Interest in Fuel Types
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- Petrol dominates with hybrid a second choice
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- Figure 58: Preference for future fuel types, December 2017
- Men and young adults show the strongest interest in alternative fuels
- Wealthy adults are a key target for new fuels
- Diesel remains popular with parents and larger households
- Non-car owners are less likely to not have a specific fuel in mind
- Hybrid and electric cars increasingly become a mainstream alternative
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- Figure 59: Preference for future fuel types, 2016-17
Innovations Sought by Buyers
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- Help with parking is a popular area for technology
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- Figure 60: Innovations sought by buyers, December 2017
- Low interest in many technical features from youngest buyers
- Young men are an important group for emerging technology
- High income earners are a valuable market
- Current car owners are more interested in innovations
- Older adults want more features
Methods of Payment
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- Avoiding debt through the use of savings or an asset dominate as payment methods
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- Figure 61: Methods of payment for next car, December 2017
- Credit is popular with younger adults
- Wealthy are more likely to use a variety of finance methods
- PCP is of particular interest to current and new car owners
- Adults aged 25-34 are more likely to use multiple payment options
- More and more payment choices are being considered
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- Figure 62: Methods of payment for next car, February and December 2017
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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- Forecast methodology
- Forecast Tables
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- Figure 63: New and used car market sales, by volume, 2012-22
- Figure 64: Forecast of new and used car sales, by volume – best- and worst-case scenarios, 2017-22
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