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The Car Aftermarket - UK - November 2016

“Replacement parts are an integral feature of the automotive market. Yet whereas recent years have seen relatively strong growth in the number of cars owned, and indeed new car sales, the value of the car aftermarket has expanded much more slowly. While this reflects a number of developments unique to this sector, price increases since the second half of 2016 appear set to move the market into a period of more buoyant expansion in value.”
– Neil Mason, Head of Retail Research

This report examines the following issues:

  • What we will be the impact of rising prices?
  • What potential does an ageing car parc offer?
  • What will be the impact of further changes to parts distribution

The car aftermarket is an important sector and comprises replacement parts that are purchased by motorists for their vehicles. However, recently the market has seen only modest value growth expanding by only 6% between 2011 and 2015. Although stimulated by the continued expansion in the size of the UK car parc, the market has seen revenues dampened by longer replacement times and the impact of low priced manufacturers in some segments of the market such as tyres. Nevertheless, with price increases following the weakening of Sterling since the middle of 2016, much stronger revenue growth is likely to occur.

Although the car aftermarket supports a wide range of parts it is tyres that are the largest single segment. Accounting for over half of value sales, their importance is reinforced by Mintel’s own research which notes that 48% of car owners have replaced at least one tyre in the previous 12 months. Other parts take a much smaller share of sales with this reflecting factors such as their price and replacement rates.

Mintel’s exclusive research for this Report notes that many car owners also take responsibility for car maintenance and servicing. Indeed this is particularly important for older men and those on lower incomes. A broad range of cars by age are in ownership with our research suggesting that continuing strong sales for new vehicles and increased reliability of older vehicles is leading to growth at both ends of the market.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Revenues set to accelerate as prices rise
              • Figure 1: Car parts aftermarket, by value, 2011-21
            • Tyres account for over half of the market
              • Figure 2: Segmentation of the car parts aftermarket, percentage value, 2011-16 (est)
            • UK car parc shows polarisation
              • Figure 3: Age structure of the car parc in years, 2011-15
            • Independent garages dominate as the main channel for replacement parts
              • Figure 4: Aftermarket outlets for sales of replacement parts*, 2016
            • Companies and brands
              • Parts aftermarket supports a large number of manufacturers
                • Figure 5: UK – Replacement tyres: company market share, by volume, 2015
              • Advertising expenditure shows evidence of recovery
                • Figure 6: Recorded above-the-line, online display and direct mail total advertising expenditure on aftermarket products, 2012-15
              • The consumer
                • Cars purchased used, as opposed to new, dominate the market
                  • Figure 7: Vehicle ownership, September 2016
                • A significant percentage of cars in ownership are over six years old
                  • Figure 8: Age of car driven, September 2016
                • Most car owners take responsibility for servicing and maintenance
                  • Figure 9: Responsibility for maintenance and servicing, September 2016
                • New parts are preferred over part worn or refurbished
                  • Figure 10: Purchase of replacement parts (new, part worn or refurbished), September 2016
                • Motor retailers are the most important channel for purchasing
                  • Figure 11: Channels used for purchasing, September 2016
                • Part failure is the main reason for replacement
                  • Figure 12: Reasons behind replacement of car part/s, September 2016
                • Independent garages and established maintenance practices receive strong support
                  • Figure 13: Statements associated with replacement parts, September 2016
                • What we think
                • Issues and Insights

                  • What we will be the impact of rising prices?
                    • The facts
                      • The implications
                        • What potential does an ageing car parc offer?
                          • The facts
                            • The implications
                              • What will be the impact of further changes to parts distribution
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • Market value is being boosted by rising prices
                                      • Expansion of the UK car parc is a major driver behind growth
                                        • An ageing car parc is also stimulating sales
                                          • Tyres are the largest segment with the strongest value growth
                                            • Budget and all-season tyres seeing increased demand
                                              • Improvements in technology boost value for some segments but not others
                                                • Number of channels offering replacement parts is in decline
                                                • Market Size and Forecast

                                                  • Depreciation of Sterling in second half of 2016 negatively impacts on prices
                                                    • Figure 14: Car aftermarket*, by value, at current and constant prices, 2011-21
                                                  • Tyres are the most valuable segment within the market
                                                    • Figure 15: Segmentation of the car aftermarket, by value, at current prices, 2011-16
                                                    • Figure 16: Car aftermarket, by value, 2011-21
                                                  • Forecast methodology
                                                    • The impact of the EU referendum vote
                                                      • Expenditure on replacement parts was impacted during the last economic slowdown
                                                        • Figure 17: Alternative market scenarios for the post-Brexit car aftermarket, at current prices, 2016-21
                                                        • Figure 18: Detailed post-Brexit scenarios for the car aftermarket, at current prices, 2016-21
                                                      • Wider demand for vehicles is set to soften after a period of expansion
                                                      • Market Segmentation

                                                        • Tyres start to see recovery in sales value
                                                          • Figure 19: Tyre sales, by value (at current prices) and volume, 2011-16
                                                        • Budget tyres dominate although the premium sector is fighting back
                                                            • Figure 20: Tyre segmentation for replacement car tyres, by volume percentage, 2011-16
                                                          • Summer tyres dominate despite the challenge from all-season
                                                            • Figure 21: Winter/all-season tyres, 2011-16
                                                          • Competition from part-worn tyres
                                                            • Value sales for other replacement parts also increasing
                                                              • Figure 22: Segmentation of the other replacement parts market, by value, at current prices, 2011-16
                                                            • Improvements in technology help boost some products …
                                                              • … while efforts to extend life impacts on other categories
                                                                • External factors impact on prices
                                                                • Channels to Market

                                                                  • Independent garages dominate the parts aftermarket
                                                                    • Figure 23: Aftermarket outlets for sales of replacement parts *, 2010-16
                                                                  • Independent garages dominate the market
                                                                    • Forecourt outlets in decline
                                                                      • Franchised dealers benefit from stability
                                                                        • Fast fit network also showing signs of stability
                                                                          • Car accessory shops continue to decline
                                                                            • Motor factor market continues to consolidate
                                                                              • The internet
                                                                              • Market Drivers

                                                                                • New car sales perform stronger than the used sector
                                                                                  • Figure 24: New and used car market registrations, 2011-16
                                                                                • UK car parc surpasses 30 million vehicles
                                                                                  • Figure 25: Number of licensed cars (Great Britain), 1995-2015
                                                                                • Second-hand cars benefit from falling prices
                                                                                  • Figure 26: Price indices of new and used cars, 2002-14
                                                                                • A car parc that is growing while also ageing
                                                                                  • Figure 27: Age structure of the car parc in years, 2011-15
                                                                                • Servicing and repair costs continue to increase
                                                                                  • Figure 28: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2011-15
                                                                                • Diesels capture sizeable share of market
                                                                                  • Figure 29: New car registrations, by fuel type, 2011-16
                                                                                • Personal mobility is in decline
                                                                                  • Figure 30: Trips, distance travelled and time taken (England), 2005-14
                                                                                • Expansion in car sales has little impact on multi-car ownership
                                                                                  • Figure 31: Percentage of households with car availability, in England, 2004-14
                                                                                • Tyres are the part most likely to need replacement
                                                                                  • Figure 32: Purchase of new, part worn or refurbished replacement parts, September 2016
                                                                                • Lighting and signalling are a key reason for MOT failure
                                                                                  • Figure 33: Road vehicle testing scheme (MOT), selected reasons for failure, car tests, 2010/11-2014/15
                                                                                • Regular maintenance is not undertaken by all car owners
                                                                                  • Other factors influencing the market
                                                                                    • UK population both growing and ageing
                                                                                      • Figure 34: Trends in the age structure of the UK population, 2011-21
                                                                                    • Brexit is likely to have a mixed impact on the market
                                                                                    • Companies and Brands – What You Need to Know

                                                                                      • Low-cost manufacturers take a growing share of the market
                                                                                        • Improvements and innovations typify the actions of manufacturers
                                                                                          • Advertising expenditure showing signs of increasing
                                                                                          • Market Share

                                                                                            • Tyre sector continues to see growth of low-cost manufacturers
                                                                                              • Nexen leads the replacement tyre market
                                                                                                • Figure 35: UK – Tyres: company market share, by volume, 2014 and 2015
                                                                                              • ‘Other’ replacement parts
                                                                                              • Competitive Strategies

                                                                                                • Acquisitions used to broaden market presence
                                                                                                  • Partnerships used to raise the profile of brands
                                                                                                    • Innovation offers the opportunity to differentiate a product within the market
                                                                                                      • Being positioned with the right image can be crucial in raising sales
                                                                                                      • Launch Activity and Innovation

                                                                                                        • All-terrain tyre
                                                                                                          • Award-winning tread-replenishing tyre
                                                                                                            • Handheld 3D tread reader device
                                                                                                              • Quickco launch e-commerce site giving private customers access to its one million car parts
                                                                                                                • Dazzle-free headlights
                                                                                                                  • Oil change in a box
                                                                                                                    • New shock absorber that saves fuel and improves ride comfortability
                                                                                                                    • Advertising and Marketing Activity

                                                                                                                      • Advertising expenditure rebounds
                                                                                                                        • Figure 36: Recorded above-the-line, online display and direct mail total advertising expenditure on aftermarket products, 2012-16
                                                                                                                      • Tyres see their share of expenditure fall back
                                                                                                                        • Figure 37: Recorded above-the-line, online display and direct mail total advertising expenditure on aftermarket products, by category, 2012-16
                                                                                                                      • Television expenditure up in 2015
                                                                                                                        • Figure 38: Recorded above-the-line, online display and direct mail total advertising expenditure on car aftermarket products, by media type, 2012-15
                                                                                                                      • Michelin and Kwik-Fit up their investment
                                                                                                                        • Figure 39: Recorded above-the-line, online display and direct mail total advertising expenditure on passenger tyres, 2012-15
                                                                                                                      • Peugeot sees a surge in component expenditure
                                                                                                                        • Figure 40: Recorded above-the-line, online display and direct mail total advertising expenditure on motor components and parts, 2012-16
                                                                                                                      • A note on adspend
                                                                                                                      • The Consumer – What You Need to Know

                                                                                                                        • Three quarters of adults own a car - three out of ten own a car under three years old
                                                                                                                          • Majority of car owners take responsibility for maintenance
                                                                                                                            • Tyres are the part that is most likely to be purchased
                                                                                                                              • New parts are more popular than refurbished or part-worns
                                                                                                                                • Specialist motor retailers dominate channels used for purchasing
                                                                                                                                  • Failure of a part is the most likely reason for its replacement
                                                                                                                                    • Independent garages receive strong support from car owners
                                                                                                                                    • Vehicle Ownership

                                                                                                                                      • Buying used is more popular than buying new
                                                                                                                                        • Figure 41: Vehicle ownership, September 2016
                                                                                                                                      • New car ownership records strong differences
                                                                                                                                        • Non-car owners are likely to be young women, urbanites and less affluent
                                                                                                                                        • Age of Car

                                                                                                                                          • Newer cars are the most prominent in terms of ownership
                                                                                                                                            • Figure 42: Age of car driven, September 2016
                                                                                                                                          • Young and old exhibit specific preferences for vehicles by age
                                                                                                                                            • Socio economic status has a big impact on age of vehicle
                                                                                                                                              • Ownership of new cars is strengthening
                                                                                                                                                • Figure 43: Age of car driven, 2011-16
                                                                                                                                            • Responsibility for Maintenance and Servicing

                                                                                                                                              • Sole responsibility typifies maintenance and servicing
                                                                                                                                                • Figure 44: Responsibility for maintenance and servicing, September 2016
                                                                                                                                              • Maintenance and servicing prove popular with older males
                                                                                                                                                • Low earners also record a strong interest in responsibility for maintenance and servicing
                                                                                                                                                • Purchase of Replacement Parts

                                                                                                                                                  • New parts are more popular than part-worn/refurbished parts
                                                                                                                                                    • Figure 45: Purchase of replacement parts, September 2016
                                                                                                                                                  • Young adults record preference for refurbished/part worn parts
                                                                                                                                                    • Urban, suburban and village car owners have different preferences
                                                                                                                                                      • Income – a major factor influencing interest in new parts
                                                                                                                                                        • Owners of used and older cars are more likely to replace certain parts
                                                                                                                                                          • A market of those purchasing some and those purchasing many
                                                                                                                                                          • Channels Used For Purchasing

                                                                                                                                                            • Motor retailers are the most important channel for purchasing
                                                                                                                                                              • Figure 46: Channels used for purchasing, September 2016
                                                                                                                                                            • Old and young car owners have different purchasing preferences
                                                                                                                                                              • Urban car owners are happy to look at various channels
                                                                                                                                                                • Wealth does not necessarily suggest a reliance on others to buy parts
                                                                                                                                                                  • Owners of used and older cars prefer to use non-traditional channels
                                                                                                                                                                  • Reasons Behind Replacement of Car Part/s

                                                                                                                                                                    • Failure dominates as the reason for parts replacement
                                                                                                                                                                      • Figure 47: Reasons behind replacement of car part/s, September 2016
                                                                                                                                                                    • Recommendations are important for women
                                                                                                                                                                      • Use of media is important in raising awareness of young car owners
                                                                                                                                                                        • Sharp contrasts in reasons for replacement by income
                                                                                                                                                                          • New car owners are responsive to product and manufacturer recalls
                                                                                                                                                                            • Other retailers have a limited role in parts replacement
                                                                                                                                                                            • Reasons Behind Replacement of Car Part/s - CHAID Analysis

                                                                                                                                                                              • Methodology
                                                                                                                                                                                • Less affluent car owners favour use of specialist retailers when purchasing car parts
                                                                                                                                                                                  • Figure 48: Car aftermarket – CHAID – Tree output, September 2016
                                                                                                                                                                                  • Figure 49: Car aftermarket – CHAID – Table output, September 2016
                                                                                                                                                                              • Statements Associated with Cars and Replacement Parts

                                                                                                                                                                                • Independent garages have a role in fitting parts
                                                                                                                                                                                  • Figure 50: Statements associated with replacement parts, September 2016
                                                                                                                                                                                • Older adults look to third parties when buying and fitting parts
                                                                                                                                                                                  • Group A adults want brands but are happy to look at different channels when purchasing
                                                                                                                                                                                    • Owners of younger cars favour involvement of others in parts replacement
                                                                                                                                                                                      • Those buying parts through general retailers think differently to those using specialise retailers
                                                                                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                        • Data sources
                                                                                                                                                                                          • Exclusions
                                                                                                                                                                                            • Abbreviations
                                                                                                                                                                                              • Consumer research methodology
                                                                                                                                                                                              • Appendix – Market Size and Forecast

                                                                                                                                                                                                • Market sizing and segment performance
                                                                                                                                                                                                  • Forecast methodology

                                                                                                                                                                                                  The Car Aftermarket - UK - November 2016

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