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Car Aftermarket - UK - November 2009

Although growth in the car parc may be slowing due to the decline in new cars sales since 2004, the proportion of older cars in the parc is rising which is creating an opportunity for increased sales of aftermarket parts and services in the UK.

The decline in new car sales since 2004 means that the proportion of cars aged seven or more years now stands at 53% an 16.6 million cars and is accounting for a larger proportion of the parc. The seven year plus sector of the car parc is therefore the prime opportunity for the car aftermarket.

An ageing car parc means that more cars are taking and failing a stricter MOT test with the failure rate standing at 35% of cars in 2007/08 compared with 30% in 2004/05. MOT-related repairs are an opportunity for garages and part suppliers to obtain a larger share of the replacement parts market.

While 64% of cars under three years old are serviced by franchised dealers, this falls to 31% of cars aged three to six years as dealers lose market share for servicing older cars to independent garages whose labour charge-out rates are nearly half those of franchised dealers.

A falling number of cars aged under five years in the car parc is a threat to franchised dealers’ share and profitability from aftersales. To win back market share from independent garages, franchised dealers need to target owners of cars aged over five years for both servicing and repairs by offering either lower labour rates or lower parts prices.

With owners of younger cars still believing they need to return a car to the dealer for servicing to maintain warranty cover, the independent garage sector would benefit from a generic marketing campaign to inform owners of cars under five years old that they can use lower cost independent garages for servicing without invalidating their warranty.

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Table of contents

  1. Issues in the Market

      • Key issues
        • Definition
          • Abbreviations
          • Future Opportunities

            • Premium or value?
              • Trading down or just not trading at all
              • Market in Brief

                • Fall in car sales slows rate of growth in car parc
                  • MOT test failures increasing
                    • Routine maintenance being deferred
                      • Modest market value growth
                        • Electrical and electronics are growth segments
                          • OE component manufacturers gaining access to aftermarket
                            • Branding important for trade communication
                              • Independent garages most important distribution channel
                                • Independent garages have largest share of car service and repair
                                  • Franchised dealers losing repair work to independent garages
                                  • Internal Market Environment

                                    • Key points
                                      • Trend to fewer car sales
                                        • Figure 1: New car registrations and used car sales, 2004-09
                                      • Scrappage scheme threat to aftermarket?
                                        • Trend to longer car replacement cycles
                                          • Figure 2: When obtained (only car or most recently obtained car), 2004-09
                                        • A slowing car parc
                                          • Figure 3: Number of cars in the car parc, 2004-09
                                          • Figure 4: Number of cars in the car parc, 2004-09
                                        • Still an ageing car parc…
                                          • Figure 5: Age structure of the car parc in years, 2008
                                          • Figure 6: Age structure of the car parc in years, 2008
                                        • But miles driven per car falling
                                          • Figure 7: Number of cars in parc and average distance (kilometres) driven, 2004-09
                                        • Diesels accounting for a greater proportion of new car sales
                                          • Figure 8: New car registrations by fuel type, 2000-09
                                        • More cars failing the MOT test
                                          • Figure 9: Road vehicle testing scheme (MOT), number of car tests, failures and percentage failures, 1997-2008
                                          • Figure 10: Road vehicle testing scheme (MOT), reasons for failure, car tests, 1997-2008
                                          • Figure 11: Road vehicle testing scheme (MOT), reasons for failure, car tests, 1997-2008
                                        • Longer new car warranties and service intervals…
                                          • … but higher dealer servicing costs?
                                            • Some minor tasks are more complex
                                              • Higher-quality OE parts and car reliability
                                                • An electric future?
                                                • Broader Market Environment

                                                  • Key points
                                                    • Consumer priorities shift away from spending and towards saving
                                                      • Figure 12: GDP, PDI, consumer expenditure and savings, at current prices, 2004-14
                                                      • Figure 13: GDP, PDI, consumer expenditure and savings, at constant 2004 prices, 2004-14
                                                    • Moving out of recession?
                                                      • Figure 14: GDP quarterly percentage change, 2004-09
                                                    • Growth in employment
                                                      • Figure 15: Employment and unemployment, by gender, 2004-14
                                                    • More families?
                                                      • Figure 16: Trends in the age structure of the UK population, by gender, 2004-14
                                                  • Competitive Context

                                                    • Key points
                                                      • Globalisation
                                                        • R&D shifts to component and system suppliers
                                                          • Higher quality manufacturing standards
                                                            • Aftermarket down, OE complexity and value up
                                                              • Counterfeit parts
                                                                • Decline in white box competition
                                                                  • Increase in remanufacturing
                                                                    • Internet distribution
                                                                      • Legislation – Regulation ECE-R90
                                                                        • Motor Vehicles Regulations 2009
                                                                          • A sector-specific Block Exemption Regulation?
                                                                          • Strengths and Weaknesses in the Market

                                                                              • Strengths
                                                                                • Weaknesses
                                                                                • Who’s Innovating?

                                                                                    • Demands of the OE market
                                                                                      • An increasing emphasis on safety
                                                                                        • Environmental pressures
                                                                                          • Aftermarket impact
                                                                                          • Market Size and Forecast

                                                                                            • Key points
                                                                                              • Market size
                                                                                                • Figure 17: UK sales of car replacement parts, 2004-09
                                                                                              • Servicing and repair spend
                                                                                                • Figure 18: Consumer expenditure on fuels and lubricants, servicing and repair and motoring expenses, at current prices, 2004-09
                                                                                              • Forecast
                                                                                                • Figure 19: UK sales of car replacement parts by value, 2004-14
                                                                                              • Factors used in the forecast
                                                                                              • Segment Performance

                                                                                                • Key points
                                                                                                  • A highly fragmented market
                                                                                                    • Figure 20: UK car replacement parts market, by segment, 2001, 2006 and 2009
                                                                                                    • Figure 21: UK car replacement parts market, by segment, percentage change, 2006-09
                                                                                                  • Brake components
                                                                                                    • Figure 22: Brake components replacement market, 2004-09
                                                                                                  • Clutch components
                                                                                                    • Figure 23: Clutch components replacement market, 2004-09
                                                                                                  • Exhausts
                                                                                                    • Figure 24: Exhaust replacement market, 2004-09
                                                                                                  • Batteries
                                                                                                    • Figure 25: Battery replacement market, 2004-09
                                                                                                  • Filters
                                                                                                    • Figure 26: Filter replacement market, 2004-09
                                                                                                  • Sparkplugs
                                                                                                    • Figure 27: Sparkplug replacement market, 2004-09
                                                                                                  • Other growth segments
                                                                                                    • Market share
                                                                                                    • Companies and Products

                                                                                                      • OE and aftermarket manufacturers
                                                                                                        • Branding important for trade promotion
                                                                                                          • Bosal International
                                                                                                            • Bosch
                                                                                                              • Delphi
                                                                                                                • Federal-Mogul
                                                                                                                  • Hella
                                                                                                                    • Tenneco
                                                                                                                      • TRW
                                                                                                                        • Valeo
                                                                                                                          • Visteon
                                                                                                                          • Brand Communication and Promotion

                                                                                                                              • Above-the-line promotion falls sharply in 2008
                                                                                                                                • Figure 28: Main monitored media expenditure on small car parts, 2004-08
                                                                                                                              • Fast-fit retailers and styling part suppliers are largest spenders
                                                                                                                                • Figure 29: Main monitored media advertising expenditure, by advertiser, 2004-08
                                                                                                                              • Brakes and clutches the largest product category
                                                                                                                                • Figure 30: Main monitored media spend, by product, 2004-08
                                                                                                                            • Channels to Market

                                                                                                                              • Key points
                                                                                                                                • Retail distribution
                                                                                                                                  • Figure 31: Aftermarket outlets for sales of replacement parts, 2008
                                                                                                                                • Independent garages and franchised dealers
                                                                                                                                    • Figure 32: Top ten franchised dealer groups, by number of outlets, 2008
                                                                                                                                  • Independent chains
                                                                                                                                    • Tyre and exhaust fitting centres
                                                                                                                                      • Figure 33: Top ten tyre and exhaust fitting centres by number of outlets, 2008
                                                                                                                                    • Kwik-Fit
                                                                                                                                      • Petrol forecourts
                                                                                                                                        • Car accessory shops
                                                                                                                                          • Figure 34: Top car accessory chains, by number of outlets, 2008
                                                                                                                                        • Halfords
                                                                                                                                          • Motor factors
                                                                                                                                            • Euro Car Parts
                                                                                                                                              • GSF Car Parts
                                                                                                                                                • The internet
                                                                                                                                                • The Consumer – Parts Purchasing

                                                                                                                                                  • Key points
                                                                                                                                                      • Figure 35: Replacement parts bought in last 12 months, June 2009
                                                                                                                                                    • DIY fitting of parts
                                                                                                                                                      • The end of direct consumer parts purchasing?
                                                                                                                                                        • The influence of car age on parts purchasing
                                                                                                                                                          • Figure 36: Replacement parts bought in last 12 months, by age of car, June 2009
                                                                                                                                                      • The Consumer – Car Servicing and Parts Purchase

                                                                                                                                                        • Key points
                                                                                                                                                            • Figure 37: Statements on car servicing, June 2009
                                                                                                                                                          • Car servicing by age of car
                                                                                                                                                            • Figure 38: Car servicing, by age of car, June 2009
                                                                                                                                                            • Figure 39: Statements on car servicing, by replacement parts bought in last 12 months, June 2009
                                                                                                                                                            • Figure 40: Statements on car servicing, by replacement parts bought in last 12 months, June 2009 (continued)
                                                                                                                                                        • The Consumer – Car Repairs and Parts Purchase

                                                                                                                                                          • Key points
                                                                                                                                                              • Figure 41: Statements on car repairs, June 2009
                                                                                                                                                            • Car repairs by age of car
                                                                                                                                                              • Figure 42: Car repair, by age of car, June 2009
                                                                                                                                                              • Figure 43: Statements on car repairs, by replacement parts bought in last 12 months, June 2009
                                                                                                                                                              • Figure 44: Statements on car repairs, by replacement parts bought in last 12 months, June 2009 (continued)
                                                                                                                                                          • Appendix – Parts Purchasing

                                                                                                                                                              • Figure 45: Most popular replacement parts purchased in last 12 months, by demographics, June 2009
                                                                                                                                                              • Figure 46: Next most popular replacement parts purchased in last 12 months, by demographics, June 2009
                                                                                                                                                          • Appendix –Car Servicing and Parts Purchase

                                                                                                                                                              • Figure 47: Replacement parts bought in last 12 months, by statements on servicing cars, June 2009
                                                                                                                                                              • Figure 48: Replacement parts bought in last 12 months, by statements on servicing cars, June 2009

                                                                                                                                                          Companies Covered

                                                                                                                                                          • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                          • Arnold Clark Automobiles Ltd
                                                                                                                                                          • Asda Group Ltd
                                                                                                                                                          • ATS Euromaster
                                                                                                                                                          • Audi United Kingdom
                                                                                                                                                          • Automobile Association (AA)
                                                                                                                                                          • Automotive Aftermarket Industry Association
                                                                                                                                                          • Bayerische Motoren Werke AG (BMW)
                                                                                                                                                          • BMW (GB) Ltd
                                                                                                                                                          • Bosal International
                                                                                                                                                          • BP p.l.c.
                                                                                                                                                          • Bridgestone Americas Holding Inc.
                                                                                                                                                          • British Market Research Bureau (BMRB)
                                                                                                                                                          • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                          • Co-operative Group
                                                                                                                                                          • CVC Capital Partners Limited
                                                                                                                                                          • Delphi Corporation
                                                                                                                                                          • Driver and Vehicle Licensing Agency
                                                                                                                                                          • Driving Standards Agency
                                                                                                                                                          • Federal-Mogul Corporation
                                                                                                                                                          • Ford Motor Company Limited (UK)
                                                                                                                                                          • Freeview
                                                                                                                                                          • General Motors Corporation
                                                                                                                                                          • Government Actuary's Department (GAD)
                                                                                                                                                          • Greenhous Group
                                                                                                                                                          • Halfords Ltd
                                                                                                                                                          • Hella UK
                                                                                                                                                          • Inchcape Retail Ltd
                                                                                                                                                          • J. Sainsbury
                                                                                                                                                          • Johnson Controls, Inc.
                                                                                                                                                          • Kia Motors UK Ltd
                                                                                                                                                          • Kwik-Fit Group Limited
                                                                                                                                                          • Lidl (UK)
                                                                                                                                                          • Marks & Spencer
                                                                                                                                                          • Mercedes-Benz UK
                                                                                                                                                          • MG Rover Group Limited
                                                                                                                                                          • Michelin North America Inc.
                                                                                                                                                          • Motor World Ltd
                                                                                                                                                          • Netto Foodstores Ltd
                                                                                                                                                          • Nissan Motor (GB) Ltd
                                                                                                                                                          • Office for National Statistics
                                                                                                                                                          • Office of Fair Trading
                                                                                                                                                          • Pendragon plc
                                                                                                                                                          • Peugeot Motor Company Plc
                                                                                                                                                          • Porsche Cars Great Britain Ltd
                                                                                                                                                          • PSA Peugeot Citroën S.A.
                                                                                                                                                          • Renault (UK) Ltd
                                                                                                                                                          • Robert Bosch GmbH
                                                                                                                                                          • Robert Bosch Ltd
                                                                                                                                                          • Royal Automobile Club
                                                                                                                                                          • Saab Automobile AB
                                                                                                                                                          • Shell (UK) Retail
                                                                                                                                                          • Skoda Auto a.s.
                                                                                                                                                          • Society of Motor Manufacturers and Traders
                                                                                                                                                          • Speedy Hire Centres
                                                                                                                                                          • Subaru (UK) Ltd
                                                                                                                                                          • Sytner Group plc
                                                                                                                                                          • Tesco Plc
                                                                                                                                                          • Texaco (UK retail)
                                                                                                                                                          • The Goodyear Tire & Rubber Company
                                                                                                                                                          • Toyota (GB) PLC
                                                                                                                                                          • TRW Automotive
                                                                                                                                                          • Vauxhall Motors Ltd
                                                                                                                                                          • Virgin Media Ltd
                                                                                                                                                          • Volkswagen UK
                                                                                                                                                          • Waitrose
                                                                                                                                                          • Warranty Direct Ltd
                                                                                                                                                          • Wilco Motor Spares Ltd
                                                                                                                                                          • Wm Morrison Supermarkets

                                                                                                                                                          Car Aftermarket - UK - November 2009

                                                                                                                                                          £1,995.00 (Excl.Tax)