UK Car Review - UK - February 2020

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
New and used car sales down for a third successive year
Figure 1: UK new and used car sales, by volume, 2014-24
Polarisation evident within the car parc
Figure 2: Age structure of the UK car parc in years, 2014 and 2018
Dual-purpose cars have seen a significant expansion in their share of sales
Figure 3: New car registrations by category, percentage point change, 2014 and 2018
Interest in diesel plummets in favour of petrol and alternative fuels
Figure 4: Sales of new cars, by fuel type, 2014 and 2019
Companies and brands
Buyers shifting from mass-market to premium
Innovations are a key area for manufacturers
Advertising investment is in decline
German premium brands show the strongest differentiation and trust
Figure 5: Attitudes towards and usage of selected brands, December 2019
The consumer
Nearly three quarters of adults now own a car
Figure 6: Car ownership, November 2019
A majority of cars in ownership were purchased from new
Figure 7: Age of car owned, November 2019
61% of non-car owners don’t hold a driving licence
Figure 8: Other access to cars, November 2019
Smaller cars are by far the most popular
Figure 9: Type of car owned, November 2019
Commuting is the main use for cars
Figure 10: Reasons to use a car, November 2019
Digital is the most popular channel for information
Figure 11: Sources of information, November 2019
What we think
ISSUES AND INSIGHTS
Where next for the car market?
The facts
The implications
What future for manufacturers outside of the premium sector?
The facts
The implications
Young adults are a key audience for sales
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Car sector remains in a weak position
Both new and used markets have seen falls
Over a third of households consist of two or more cars
Franchised dealers continue to strengthen their market presence
Cars are becoming more expensive for owners
MARKET SIZE AND FORECAST
Car sales remain weak with a further fall in sales likely in 2020
Figure 12: UK new and used car sales, by volume, 2014-24
Forecast methodology
MARKET SEGMENTATION
Both new and used markets are in retreat
Figure 13: New and used car market volumes, 2014-19
Trend towards owning older cars is increasing…
Figure 14: Age structure of the UK car parc in years, 2014-18
… as UK car parc expands
Figure 15: Number of licensed cars (Great Britain), million units, 1998-2018
Cars are most likely to be used on trips of more than five miles
Figure 16: Mode share of trips, by main mode (different trip lengths), England, 2018
Growing percentage of households own two or more vehicles
Figure 17: Percentage of households with car availability, England, 2008-18
Car ownership is growing although is lowest in London
Figure 18: Household car ownership by region (England), 2007/08 and 2017/18
Dual/multi-purpose vehicles are becoming more popular with buyers
Figure 19: New car registrations, by broad segment (volume share), 2013 and 2018
Dual-purpose cars increasingly challenge smaller vehicles
Figure 20: New car registrations by category, 2015-18
Alternative fuelled vehicles making progress in the new car sector…
Figure 21: Sales of new cars by fuel type, 2014-19
… although petrol vehicles continue to dominate the wider car parc
Figure 22: Number of licensed cars (Great Britain), million units, 2014-19
CHANNELS TO MARKET
Franchised dealers continue to strengthen market presence
Figure 23: Sales of new and used cars, by channel, 2014-18
MARKET DRIVERS
More men are likely to be car owners
Figure 24: Full car driving licence holders by age and gender, England, 2018
Trips taken are growing but not distance travelled
Figure 25: Trips, distance travelled and time taken, England, 2008-18
Costs of owning a car have risen noticeably since 2017
Figure 26: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2014-19
Over half of adults plan to buy a car in the next three years
Figure 27: Do you or someone else in your household plan to buy a car(s) within the next three years, November 2019
Around half of buyers will purchase new in the next three years
Figure 28: Intention of purchasing a car/s in the next three years, by new or used/second-hand purchase, November 2019
Restrictions on using a car are growing
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Premium marques are in the ascendance
Innovations focus on safety and comfort
Advertising investment is in decline
Brands occupy distinct positions within the market
MARKET SHARE
Premium marques are in the ascendance
Volume manufacturers suffer with value brands partly to blame
Figure 29: Manufacturer shares of new car registrations, 2013, 2015, 2017 and 2019
New buyers prefer small cars
Figure 30: Top 10 new car models, 2018 and 2019
Used market sees growing presence for premium brands
Figure 31: Top 10 used car models, 2018 and 2019
LAUNCH ACTIVITY AND INNOVATION
Volvo redefines its view of personal mobility
Drive Recorder offers improved video recording
AirBubbl offers enhanced indoor air quality
Figure 32: AirBubbl in-car air cleaner
Subaru Driver Monitoring System
ADVERTISING AND MARKETING ACTIVITY
Advertising investment follows same track as new car sales
Figure 33: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2015-19
Hybrids, electric and alternative vehicles represent an emerging sector
Figure 34: Recorded above-the-line, online display and direct mail total advertising expenditure, by type of car, 2015-19
Most manufacturers have scaled back investment
Figure 35: Recorded above-the-line, online display and direct mail total advertising expenditure by leading car manufacturers, 2015-19
Television is by far the most important channel for advertisers
Figure 36: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2015-19
Nielsen Ad Intel coverage
BRAND RESEARCH
Premium German brands perform well for trust and differentiation
Figure 37: Attitudes towards and usage of selected brands, December 2019
Key brand metrics
Figure 38: Key metrics for selected brands, December 2019
Brand attitudes: Škoda and Kia are seen as offering good value
Figure 39: Attitudes, by brand, December 2019
Brand personality: MINI is positioned as fun while Škoda is viewed as boring
Figure 40: Brand personality – macro image, December 2019
Brand personality: Micro image analysis presents a complex landscape
Figure 41: Brand personality – micro image, December 2019
THE CONSUMER – WHAT YOU NEED TO KNOW
74% of adults own a car
Most cars in ownership were purchased new
Strong link between holding a driving licence and owning a car
Smaller cars are more popular
Commuting is by far the most important use for a car
Digital is the most important channel for information
CAR OWNERSHIP
Nearly three quarters of adults now own a car
Figure 42: Car ownership, November 2019
Personal wealth is a major factor impacting on car ownership
Car ownership is growing
Figure 43: Car ownership, 2015-19
AGE OF CAR OWNED
A majority of cars in ownership were purchased from new
Figure 44: Age of car owned, November 2019
Wealth strongly favours the recent purchase of a new car
Young adults are more likely to have purchased in the last two years
New cars are popular in London
Men prefer to buy new
Sluggish recent sales of new cars evident in ownership data
Figure 45: Age of car owned, 2015-19
OTHER ACCESS TO CARS
Around six out of 10 of non-car owners don’t hold a driving licence
Figure 46: Other access to cars, November 2019
Women are more likely to not hold a driving licence
Potential market for car purchasers is significant
TYPE OF VEHICLE OWNED
Smaller cars are preferred
Figure 47: Type of car owned, November 2019
Smaller cars are popular with women
Opportunities exist to exploit young car owners
Wealth favours the ownership of large, luxury and specialist vehicles
New cars purchased recently mirror wider trends towards specific categories
Large cars and SUVs appeal to those with specific demands
SUVs represent the most dynamic segment of the market
Figure 48: Type of car owned, 2016- 19
REASONS TO USE A CAR
Commuting is ranked as the main use for a car
Figure 49: Reasons to use a car, November 2019
Young and old have different uses for a car
Rural and urban car owners want different things
New and used owners have different priorities for their cars
Growing interest in SUVs fits with stronger leisure demands
SOURCES OF INFORMATION
Digital dominates when it comes to information on cars
Figure 50: Sources of information, November 2019
Young adults favour a wider range of information sources
City dwellers are likely to rely on less popular channels
Television, digital and printed publications divide the market
Information is important for new car buyers…
… with owners of small and large vehicles likely to use different channels
Repertoire analysis suggests young men favour multiple sources
Television losing out as interest in other media broadens
Figure 51: Sources of information, 2017-19
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Exclusions
Market sizing and segment performance
Abbreviations
Consumer research methodology