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Car Market - Into and Out of Recession - UK - January 2009

With sales of new cars in the UK plunging as the UK economy goes into a steep economic decline, this report analyses the consequences for the car market of the first recession to affect the UK since 1992.

The car market is a barometer of the UK economy with car sales traditionally being one of the first market sectors to decline as a recession takes hold. It is also, however, one of the first market sectors to bounce back as the economy recovers.

The report, therefore, seeks to answer how long the recession is likely to last; what the consequences for new and used car sales will be; and what opportunities there will still be for car manufacturers and dealers to lift car sales in the recession.

Main report themes:

  • How long is the recession likely to last compared with previous recessions?

  • When are car sales likely to recover?

  • To what extent have new and used car purchases been deferred?

  • Which consumers have stopped buying cars as a consequence of the recession?

  • Which consumer groups are the main owners and buyers of new and used cars?

  • Which consumer groups offer the best prospect for car sales during the recession and which consumers will lead the car market out of recession?

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Table of contents

  1. Issues in the Market

      • Main issues
        • TGI lifestage definitions
          • Abbreviations
          • Future Opportunities

            • Pawn purchasing
              • Not just trading down but slowing down
              • Market in Brief

                • Into recession
                  • It’s different this time
                    • Skewed demographics of car purchasing
                      • Lifestage and life events as determining factors
                        • Property as a determining factor
                          • The cash conundrum
                            • Finance opportunities
                              • Brand features and preferences
                              • The UK Car Market – Into and Out of Recession

                                • Into recession
                                  • Figure 1: New car registrations and used car sales, 2003-08
                                • The effects of recession – retail demand hit hard
                                  • Figure 2: UK new car sales, total and private, 2003-08
                                • Deferred purchasing and higher used demand
                                  • Value of car sales
                                    • Figure 3: Total value of car sales, 2003-13
                                  • New car sales
                                    • Figure 4: value of new car sales, 2003-13
                                  • Used car sales
                                    • Figure 5: value of used car sales, 2003-13
                                  • Factors used in the forecast
                                    • How this recession will differ from past recessions
                                      • Lower interest rates this time…
                                        • …but much higher levels of debt
                                          • Figure 6: Consumer credit, amounts outstanding, 2003-08
                                          • Figure 7: Consumer credit outstanding and disposable income, 1991 and 2008
                                        • Potential increase in PDI?
                                          • Figure 8: Types of mortgages currently held, January 2008
                                        • The post-recession bounce-back
                                          • Figure 9: Rate of change in total consumer spending and consumer spending on cars, 1989-99
                                          • Figure 10: Rate of change in spending on cars compared with interest rates, 1989-99
                                        • Unemployment and confidence key to recovery
                                          • Figure 11: Relationship between interest rates and consumer confidence, 2004-08
                                      • The Car Owner – Trends in Ownership

                                        • Key points
                                          • The profile of car ownership
                                              • Figure 12: Profile of car ownership, by gender, age, socio-economic group and region, 2002 and 2008
                                            • The penetration of car ownership
                                                • Figure 13: Penetration of car ownership, by gender, age, socio-economic group and region, 2002 and 2008
                                              • Lifestage analysis
                                                • Profile of car ownership by lifestage
                                                  • Figure 14: Profile of car ownership, by lifestage, 2002 and 2008
                                                • Penetration of car ownership by lifestage
                                                  • Figure 15: Penetration of car ownership, by lifestage, 2002 and 2008
                                              • The Car Buyer – Trends in Purchasing

                                                • Key points
                                                  • Deferred purchasing
                                                    • Figure 16: Areas of deferred spending, December 2008
                                                  • Purchasing cycles
                                                    • Figure 17: Time since purchased most recent car, by demographic sub-group, 2008
                                                  • Purchasing cycles – influence of lifestage and life events
                                                    • Figure 18: Time since purchased most recent car, by lifestage and life event, 2008
                                                  • Who intends to buy?
                                                    • Figure 19: Intention to buy a vehicle, by demographic sub-group, 2008
                                                  • Who intends to buy? – by lifestage and life event
                                                    • Figure 20: Intention to buy a vehicle, by lifestage and life event, 2008
                                                • The Car Buyer – New or Second-hand?

                                                  • Key points
                                                    • Property ownership – a major influence on new car demand
                                                      • Figure 21: Type of car intend to buy, by demographic sub-group, 2008
                                                    • New or second-hand? – influenced by lifestage and life event
                                                        • Figure 22: Type of car intend to buy, by lifestage and life event, 2008
                                                      • Replacement or new demand?
                                                          • Figure 23: Type of car intend to buy, by demographic sub-group, 2008
                                                        • The impact of lifestage and life event on new or replacement demand
                                                          • Figure 24: Type of car intend to buy, by lifestage and life event, 2008
                                                      • The Car Buyer – Buying and Paying For It!

                                                        • Key points
                                                          • Cost of car intended to buy
                                                            • Figure 25: Expected cost of car purchase, new and second-hand, December 2008
                                                          • Method of payment of next car
                                                            • Figure 26: Expected method of payment for next car, new and second-hand, December 2008
                                                          • Where next car will be bought
                                                            • Figure 27: Expected source of purchase of next car, new and second-hand, December 2008
                                                        • Brand and Feature Preferences

                                                          • Key points
                                                            • Most important features when buying a car
                                                              • Figure 28: Most important features sought when buying a car, December 2008
                                                            • New and second-hand feature preferences
                                                              • Figure 29: Most important features sought when buying a new or used car, new and second-hand, December 2008
                                                            • Overall brand preference
                                                              • Figure 30: Most preferred brands that car owners would consider buying as a new or used car, December 2008
                                                              • Figure 31: Perceived positive and negative attributes of ten principal brands, December 2008
                                                            • New and second-hand brand preferences
                                                              • Figure 32: Brand preferences of those intending to buy, new and second-hand, December 2008
                                                            • Brand performance in the recession – top attributes
                                                              • Figure 33: Index of brands’ perceived combined performance for price, reliability and fuel economy, December 2008
                                                            • Brand performance in the recession – all attributes
                                                              • Figure 34: Index of brands’ perceived combined performance for all attributes, December 2008
                                                            • Brand performance in the recession – actual and potential
                                                              • Figure 35: Potential and actual brand performance, December 2008
                                                          • Appendix

                                                            • Where people intend to buy their next car
                                                              • Figure 36: Where people intend to buy their next car from, by demographic sub-groups, December 2008
                                                            • How much next car is likely to cost
                                                              • Figure 37: How much next car is likely to cost, by demographic sub-groups, December 2008
                                                            • How adults intend to finance the next car they buy
                                                              • Figure 38: How adults intend to finance the next car they buy, by demographic sub-groups, December 2008
                                                            • Important features when choosing to buy a car
                                                              • Figure 39: Most important features when choosing to buy a car, by demographic sub-groups, December 2008
                                                              • Figure 40: Next most important features when choosing to buy a car, by demographic sub-groups, December 2008

                                                          Companies Covered

                                                          • AB Volvo
                                                          • Aldi Stores Ltd (UK & Ireland)
                                                          • Alfa Romeo
                                                          • Asda Group Ltd
                                                          • Audi United Kingdom
                                                          • Automobile Association (AA)
                                                          • Bank of England
                                                          • Bayerische Motoren Werke AG (BMW)
                                                          • BMW (GB) Ltd
                                                          • British Market Research Bureau (BMRB)
                                                          • British Sky Broadcasting Group plc (BSkyB)
                                                          • Co-operative Group
                                                          • Driver and Vehicle Licensing Agency
                                                          • Driving Standards Agency
                                                          • Fiat Auto
                                                          • Ford Motor Company Limited (UK)
                                                          • Freeview
                                                          • Honda Motor Co. Ltd (UK)
                                                          • J. Sainsbury
                                                          • Jaguar Cars Limited
                                                          • Kia Motors UK Ltd
                                                          • Land Rover UK
                                                          • Lidl (UK)
                                                          • Marks & Spencer
                                                          • Mercedes-Benz UK
                                                          • Nationwide Building Society
                                                          • Netto Foodstores Ltd
                                                          • Nissan Motor (GB) Ltd
                                                          • Office for National Statistics
                                                          • Orange plc (UK)
                                                          • Peugeot Motor Company Plc
                                                          • Renault (UK) Ltd
                                                          • Royal Automobile Club
                                                          • Saab Automobile AB
                                                          • Skoda Auto a.s.
                                                          • Society of Motor Manufacturers and Traders
                                                          • T-Mobile (UK) Ltd
                                                          • Tata Group
                                                          • Tesco Plc
                                                          • Toyota (GB) PLC
                                                          • Vauxhall Motors Ltd
                                                          • Virgin Media Ltd
                                                          • Virgin Mobile
                                                          • Vodafone Group Plc (UK)
                                                          • Volkswagen UK
                                                          • Waitrose
                                                          • Wm Morrison Supermarkets

                                                          Car Market - Into and Out of Recession - UK - January 2009

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