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
- Sales down for a second consecutive year
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- Figure 1: UK new and used car sales, by volume, 2013-23
- New and used car volumes are both in decline
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- Figure 2: New and used car sales, by volume, 2013-18
- Demand for new diesel cars collapses
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- Figure 3: Sales of new cars, by fuel type, by volume, 2013 and 2018
- Franchised dealers dominate the market
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- Figure 4: New and used car volumes, by channel, 2014 and 2018
- Companies and brands
- Mass-market brands suffer as many more buyers look towards premium marques
- Acquisitions remain a key feature of the supplier market
- Advertising expenditure down 11% in 2018 compared with previous year
- The consumer
- 70% of adults own a car
- Used car ownership is greater than new car ownership
- Main dealers dominate when it comes to sales
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- Figure 5: Where last car was purchased, November 2018
- 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, November 2018
- Over half expect to buy in the next 12 months
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- Figure 7: Timescale for purchasing a car in the next three years, November 2018
- New cars account for around half of planned purchases
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- Figure 8: Likelihood of new or used purchase, November 2018
- Online dominates for most stages of the car buying process
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- Figure 9: Innovations sought by buyers, November 2018
- Petrol is by far the most preferred fuel for buyers
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- Figure 10: Preference for future fuel types, November 2018
- Innovations focused around parking are popular with buyers
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- Figure 11: Innovations sought by buyers, November 2018
- What we think
Issues and Insights
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- Difficulties for both new and used sales
- The facts
- The implications
- Alternatives to petrol and diesel still need to make progress
- The facts
- The implications
- Online is not making progress in all areas
- The facts
- The implications
The Market – What You Need to Know
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- Car market is expected to see mixed fortunes going forward
- Difficulties evident for new/used and private/fleet/business sectors
- Franchised dealers increasing their share of sales
- Consumer financial wellbeing subdued during 2018
Market Size and Forecast
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- Total car sales fall 3.2% during 2018
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- Figure 12: UK new and used car sales, by volume, 2013-23
- Figure 13: Best- and worst-case forecasts for UK new and used car sales, 2013-23
- Forecast methodology
Market Segmentation
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- New and used car purchasing softens
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- Figure 14: New and used car market volumes, 2013-18
- Private market suffers greater loss than business and fleet sector…
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- Figure 15: UK new registrations of cars, 2013-18
- …resulting in growth in market share for company registrations
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- Figure 16: New car registrations, by keeper, Great Britain, 2013-17
- Dual/Multipurpose vehicles grow their share of new car sales
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- Figure 17: New car registrations, by broad segment (volume share), 2013 and 2018
- Few segments have performed well since overall sales began to decline in 2016
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- Figure 18: Change in new car registrations, by segment (volume), 2016-18
- North-South divide emerging for new car registrations
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- Figure 19: New car registrations, by region, United Kingdom, 2013-17
- Less than a third of new cars sold in 2018 were diesel…
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- Figure 20: Sales of new cars, by fuel type, 2013-18
- …with electric and hybrid cars becoming increasingly popular
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- Figure 21: Hybrid and electric new car registrations (Great Britain), by volume, 2013-23
Channels to Market
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- Franchised dealers strengthen market presence
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- Figure 22: Sales of new and used cars, by channel, 2014-18
- Private sellers are of declining importance for used sales
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- Figure 23: Sales of new and used car volumes, by channel, 2014-18
- Dealer network in decline
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- Figure 24: Number of UK franchised dealer outlets, 2008-18
- Biggest brand portfolios suffer some of the biggest falls
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- Figure 25: Percentage change in sales points (10 largest brands), 2008-18
- Consolidation boosts profile of larger groups
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- Figure 26: Top 10 main dealership groups in the UK, by turnover, 2018
- Motorpoint dominates the independent sector
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- Figure 27: Top 10 independent dealership groups in the UK, by turnover, 2017/18
- Online retailing remains a niche channel
- Competition amongst major online players intensifies
Market Drivers
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- Consumer wellbeing has fallen during 2018…
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- Figure 28: The financial wellbeing index, January 2015-October 2018
- …as Brexit concerns for the sector heighten
- Consumer lending for cars up significantly since 2013
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- Figure 29: Value of advances (£m) on sales of all cars bought on finance by consumers at point of sale, 2013-18
- Inflationary pressures ease during 2018
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- Figure 30: Annual change in CPI, Q1 2008-Q4 2018
- Rising costs hit those owning and using a car…
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- Figure 31: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2013-17
- …with average insurance costs up 18.7% between 2013 and 2018
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- Figure 32: Average premium for comprehensive car insurance policies, 2013-18
- A number of alternatives to car ownership are available
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- Figure 33: Alternatives to car ownership, 2015 and 2017
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- Figure 34: Car club vehicle and membership (Great Britain), May 2018
- Taxi and private hire licences expand significantly since 2005
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- Figure 35: Total licensed taxi and private hire vehicles (England and Wales), 2005-18
- Bus use down while use of rail ahead
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- Figure 36: Public transport passenger journeys (Great Britain), 2007/08-2017/18
Companies and Brands – What You Need to Know
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- Mass-market manufacturers suffer from fall in share
- Acquisitions are a feature of the market
- Innovations focus on retailing
- Advertising expenditure falls 11% during 2018 compared with 2017
Market Share
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- Mass-market manufacturers suffer a fall in market share
- Mercedes-Benz is the best-performing major brand
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- Figure 37: Manufacturer shares of new car registrations, 2012-18
- Big models suffer as market fragments…
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- Figure 38: Leading new car models, 2014-18
- …with evidence of a similar trend in the used market
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- Figure 39: Leading used car models, 2016-18
Competitive Strategies
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- Acquisitions continue to be key elements for growth
Launch Activity and Innovation
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- Ford looks at a diversified approach towards retailing
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- Figure 40: Digital FordStore, Manchester, 2018
- Tootle expands presence into car retailing
- Amazon proving popular as a way to engage with potential buyers
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- Figure 41: Alfa Romeo Amazon test drive initiative, 2018
- LeasePlan looking to disrupt market with home deliveries
- Volkswagen pursuing a Europe-wide approach to retailing
Advertising and Marketing Activity
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- Investment drops 11% in 2018
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- Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, 2014-18
- Investment is focused on February and August
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- Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, monthly share of annual expenditure, 2017 and 2018
- Webuyanycar.com is the biggest investor
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- Figure 44: Leading UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2014-18
- Television dominates with digital growing its presence
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- Figure 45: UK car dealers: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2014-18
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- 70% of adults own a car
- Men and young adults are important car buyers in the last two years
- Main dealers are the most popular channel for purchasing
- Over half of adults plan to buy a car in the next three years
- Use of online and dealers/garages when purchasing varies
- Petrol is by far the most popular choice of fuel
- Technical features associated with parking are popular with buyers
Car Ownership
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- More than seven out of 10 adults own a car
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- Figure 46: Car ownership, November 2018
- Wealth plays a major factor in car ownership
- Car ownership is gradually increasing
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- Figure 47: Car ownership, 2014-18
- Used cars purchased represent a bigger market
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- Figure 48: Age of car owned, November 2018
- Young and old adults focus on different market sectors
- Men are likely to buy new while women are more likely to buy used
- City residents favour buying new
- Wealth impacts strongly on new and used choice
- New car sales have benefited most in recent years
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- Figure 49: Age of car owned, 2014-18
- The majority of those without a car don’t possess a driving licence
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- Figure 50: Other access to cars, November 2018
- Age is the most important factor for non-car ownership
- Older adults have the potential to become car owners
Where Last Car Was Purchased
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- Over half of cars are purchased at a main dealer
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- Figure 51: Where last car was purchased, November 2018
- Main dealers popular with most affluent and oldest buyers…
- …while least affluent favour independent dealers
- Youngest adults favour private sellers
- Dealers popular for purchasers of new cars
- Main dealers strengthen their market presence
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- Figure 52: Where last car was purchased, 2016-18
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 53: Intention to purchase a car in the next three years, November 2018
- Young adults are committed purchasers
- Wealth and status play a major factor in purchase intentions
- Intentions of city residents towards purchasing need to be noted
- New car owners are more confident about short-term purchasing
- Uncertainty overall is increasing towards buying a car
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- Figure 54: Intention of purchasing a car/s in the next three years, 2016-18
- Over half of those purchasing will do so in the next year
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- Figure 55: Timescale for purchasing a car in the next three years, November 2018
- Men and women have different priorities
- Rural purchasers seem less keen to buy in the next year
- New car owners favour purchasing in the coming 12 months
- Short-term interest in buying remains strong
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- Figure 56: Timescale for purchasing a car in the next three years, 2016-18
- Around half of buyers will purchase a new car
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- Figure 57: Likelihood of new or used purchase, November 2018
- Men prefer new while women used
- Preferences also exist by age
- Urban buyers are likely to opt for new over used
- Buying new is already popular with existing new car owners
- Interest in buying new has fluctuated since 2016
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- Figure 58: Intention of purchasing a car/s in the next three years, 2016-18
Role of Online When Purchasing
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- Online dominates up to finalising choice of car
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- Figure 59: Innovations sought by buyers, November 2018
- Online popular with young adults at early and final stages of purchase
- Urban residents favour online for finalising their choice
- Online popular channel for owners of used cars
Interest in Fuel Types
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- Petrol is the clear leader as a fuel
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- Figure 60: Preference for future fuel types, November 2018
- Young adults are not fully embracing environmental technology
- Hybrids popular with middle-aged adults
- Londoners shun traditional fuels
- Lack of interest in new fuels from those planning to buy used
- Pure Electric and Plug-in Hybrid are increasingly of interest
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- Figure 61: Preference for future fuel types, 2016-18
Innovations Sought by Buyers
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- Parking assistance dominates interest
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- Figure 62: Innovations sought by buyers, November 2018
- Middle-aged adults favour parking and driving support
- Night vision appeals to rich and poor
- Strong interest in multiple innovations
- Buyers of new cars are more likely to seek out innovations
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 tables
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- Figure 63: New and used car market sales, by volume, 2013-23
- Figure 64: Forecast of new and used car sales, by volume – Best- and worst-case scenarios, 2018-23
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