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Description

Description

“Car purchasing continued to suffer during 2019 with sales of both new and used cars continuing to decline. The situation is set to get worse in the short-term as COVID-19 impacts on the market during 2020 although an improvement is expected thereafter. Going forward, understanding the polarisation taking place in the market and how to attract buyers to alternative technologies in the face of a future ban on petrol and diesel will be critical for manufacturers and sellers.”

– Neil Mason, Head of Retail Research

This report examines the following issues:

  • Recent difficulties for the car market are not over yet
  • Tipping point increasingly approaching for alternative propulsion technologies
  • Polarising market impacts on brand and model share

What's included

What's included

Table of contents

Table of contents

  1. 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
            • The new sector has performed worse than the used sector
              • Figure 2: New and used car sales, by volume, 2016-19
            • Preferences from buyers shift towards dual/multipurpose cars
              • Figure 3: New car registrations, by broad segment (volume share), 2013 and 2018
            • Companies and brands
              • Market increasingly split between premium and value brands
                • Manufacturers and brands are responding differently to changing market conditions
                  • Promotional investment down mirroring falling sales
                    • The consumer
                      • Nearly three quarters of adults now own a car
                        • Figure 4: Car ownership, November 2019
                      • A majority of cars in ownership were purchased from new
                        • Figure 5: Age of car owned, November 2019
                      • 61% of non-car owners don’t hold a driving licence
                        • Figure 6: Other access to cars, November 2019
                      • Main dealers dominate the market when it comes to sales
                        • Figure 7: Where last car was purchased, November 2019
                      • More adults plan to buy than not buy a car in the next three years
                        • Figure 8: Intention to purchase a car in the next three years, November 2019
                      • Just under half expect to buy in the next 12 months
                        • Figure 9: Timescale for purchasing a car in the next three years, November 2019
                      • New cars account for a steady 51% of planned purchases
                        • Figure 10: Likelihood of new or used purchase, November 2019
                      • Alternative fuels to petrol and diesel are finding increased interest
                        • Figure 11: Preference for future fuel types, November 2019
                      • Price dominates when choosing between brands
                        • Figure 12: Purchasing metrics, November 2019
                      • Costs dominate when purchasing an electric car powered by a battery
                        • Figure 13: Purchasing an electric car, November 2019
                      • What we think
                      • Issues and Insights

                        • Recent difficulties for the car market are not over yet
                          • The facts
                            • The implications
                              • Tipping point increasingly approaching for alternative propulsion technologies
                                • The facts
                                  • The implications
                                    • Polarising market impacts on brand and model share
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • Sales fell for a third successive year in 2019
                                            • New car sales have been falling faster than those in the used sector
                                              • Interest in dual purpose cars comes from all sectors of the market
                                                • Falling new car sales impacts franchised dealers
                                                  • Confidence had been returning but the outlook is now uncertain
                                                  • Market Size and Forecast

                                                    • Recent weak sales expected to be hit further by the arrival of COVID-19
                                                      • Figure 14: UK new and used car sales, by volume, 2014-24
                                                  • Market Segmentation

                                                    • Both new and used markets are in retreat
                                                      • Figure 15: New and used car market volumes, 2014-19
                                                    • Loss of private buyers is a key reason behind falling new car sales
                                                      • Figure 16: UK new registrations of cars, 2014-19
                                                    • South East registers strongest increase in new registrations
                                                      • Figure 17: New car registrations, by region, United Kingdom, 2014-18
                                                    • Women are much less likely to register a new car than men
                                                      • Figure 18: New car registrations, by keeper, Great Britain, 2014-18
                                                    • Dual/multipurpose vehicles grow are the best performing sector…
                                                      • Figure 19: New car registrations, by broad segment (volume share), 2013 and 2018
                                                    • …being popular across all purchasing markets
                                                      • Figure 20: New car registrations, by buying group and segment (volume), 2019
                                                    • Interest in diesel fades amongst purchasers…
                                                      • Figure 21: Sales of new cars by fuel type, 2014-19
                                                    • ...as buyers increasingly look at electric and hybrid alternatives
                                                      • Figure 22: Sales of new electric cars by type, 2014-19
                                                  • Channels to Market

                                                    • Falling new car sales halts progress for franchised dealers
                                                      • Figure 23: Sales of cars, by channel, 2015-19
                                                    • Franchised dealers dominate the new car market
                                                      • Figure 24: Sales of new cars, by channel, 2019
                                                    • Used car retailing is a more open market
                                                      • Figure 25: Sales of used cars, by channel, 2019
                                                    • Dealer network contracts by 342 outlets during the past decade
                                                      • Figure 26: Number of UK franchised dealer outlets, 2009-19
                                                    • Market performance has resulted in some manufacturers reducing sales points
                                                      • Figure 27: Percentage change in sales points (10 largest), 2009-19
                                                    • Consolidation boosts profile of larger groups
                                                      • Figure 28: Top 10 main dealership groups in the UK, by turnover, 2019
                                                    • Strong performance from independent retailers
                                                      • Figure 29: Top 10 independent dealership groups in the UK, by turnover, 2018/19
                                                    • Online fails to make an impact
                                                    • Market Drivers

                                                      • Concerns about leaving the EU increase during 2019…
                                                        • Figure 30: Level of concern over the impact of the EU referendum, July 2016-October 2019
                                                      • …although appear to have minimal impact on consumer financial wellbeing
                                                        • Figure 31: The financial wellbeing index, January 2015-October 2019
                                                      • Unknown impacts remain a concern
                                                        • Costs of owning a car have risen noticeably since 2016
                                                          • Figure 32: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2014-19
                                                        • Insurance costs down slightly since 2017 peak
                                                          • Figure 33: Average premium for comprehensive car insurance policies, 2014-19
                                                        • Consumer lending for cars continues to increase
                                                          • Figure 34: Value of advances (£m) on sales of all cars bought on finance by consumers at point of sale, 2015-19
                                                        • Public transport remains popular
                                                          • Figure 35: Public transport passenger journeys (Great Britain), 2008/09-2018/19
                                                        • Car hire remains a popular alternative to car ownership
                                                          • Figure 36: UK short-term car rental, by volume (private and corporate), 2014-19
                                                        • Car sharing has seen a dramatic expansion in use
                                                          • Figure 37: Car club vehicle and membership growth, 2009 and 2019
                                                        • Other alternatives are also available
                                                          • Private hire taxis have increased their presence
                                                            • Figure 38: Total licensed taxi and private hire vehicles (England and Wales), 2009-19
                                                        • Companies and Brands – What You Need to Know

                                                          • Premium brands continue to make progress
                                                            • Manufacturers and brands are responding differently to changing market conditions
                                                              • Falling sales hit promotional expenditure and channel preferences
                                                              • Market Share

                                                                • New car buyers opt increasingly for premium brands…
                                                                  • …with volume car makers suffering as purchasers increasingly seek out value
                                                                    • Figure 39: Manufacturer shares of new car registrations, 2013, 2015, 2017 and 2019
                                                                  • Shift away from mass market brands fragments new model popularity…
                                                                    • Figure 40: Leading new car models, 2015-19
                                                                  • …with the used market seeing the growing presence of premium brands
                                                                    • Figure 41: Leading used car models, 2016-19
                                                                • Competitive Strategies

                                                                  • Acquisitions continue but at a muted pace
                                                                    • Rebranding to streamline market presence
                                                                      • A number of brands have been affected by retrenchment
                                                                      • Advertising and Marketing Activity

                                                                        • Investment down by nearly a fifth between 2017 and 2019
                                                                          • Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, 2015-19
                                                                        • Falling investment during 2019 hits traditional investment
                                                                          • Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure by UK car dealers, monthly share of annual expenditure, 2018 and 2019
                                                                        • Biggest advertisers are also major market players
                                                                          • Figure 44: Leading UK car dealers: Recorded above-the-line, online display and direct mail total advertising expenditure, 2015-19
                                                                        • Falling investment hits support for television and digital
                                                                          • Figure 45: UK car dealers: recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2015-19
                                                                        • Nielsen Ad Intel coverage
                                                                        • 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
                                                                                • Main dealers are the most important sales channel
                                                                                  • Short term purchasing intentions remain on hold
                                                                                    • Interest in alternatives to petrol are high
                                                                                      • Price is prioritised the highest when comparing brands
                                                                                        • Costs are a major factor when considering a battery-powered electric car
                                                                                        • Car Ownership

                                                                                          • Nearly three quarters of adults now own a car
                                                                                            • Figure 46: Car ownership, November 2019
                                                                                          • Personal wealth is a major factor impacting on owning a car
                                                                                            • Car ownership is growing
                                                                                              • Figure 47: Car ownership, 2015-19
                                                                                          • Age of Car Owned

                                                                                            • A majority of cars are purchased from new
                                                                                              • Figure 48: 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 49: Age of car owned, 2015-19
                                                                                                  • Other Access to Cars

                                                                                                    • A majority of non-car owners don’t hold a driving licence
                                                                                                      • Figure 50: Other access to cars, November 2019
                                                                                                    • Women offer good long-term opportunities as potential car buyers
                                                                                                      • Potential market for car purchasers is significant
                                                                                                      • Where Last Car Was Purchased

                                                                                                        • Main dealers dominate when it comes to purchasing
                                                                                                          • Figure 51: Where last car was purchased, November 2019
                                                                                                        • Older adults and the affluent offer opportunities for main dealers
                                                                                                          • Private sellers are important to young and less affluent
                                                                                                            • Franchised dealers not popular with used car buyers
                                                                                                              • Independents benefit from a stronger used car market
                                                                                                                • Figure 52: Where last car was purchased, 2017-19
                                                                                                            • Car Purchasing Intentions

                                                                                                              • More adults plan to buy than not buy a car in the next three years
                                                                                                                • Figure 53: Intention to purchase a car in the next three years, November 2019
                                                                                                              • Wealth is a major factor affecting purchasing intentions
                                                                                                                • Older women are more likely to be unsure
                                                                                                                  • Intention to purchase a car is strengthening
                                                                                                                    • Figure 54: Intention of purchasing a car/s in the next three years, 2017-19
                                                                                                                  • Sizeable percentage of buyers have no immediate purchase plans
                                                                                                                    • Figure 55: Timescale for purchasing a car in the next three years, November 2019
                                                                                                                  • Older buyers are likely to wait before purchasing
                                                                                                                    • City dwellers and wealthy offer good short-term opportunities…
                                                                                                                      • …as do families
                                                                                                                        • Owners of new cars are more likely to buy in the short-term
                                                                                                                          • Short-term decline in purchasing intentions amongst likely buyers evident
                                                                                                                            • Figure 56: Timescale for purchasing a car in the next three years, 2017-19
                                                                                                                          • New cars are still popular amongst buyers
                                                                                                                            • Figure 57: Likelihood of new or used purchase, November 2019
                                                                                                                          • Wealth is a key factor in decision making
                                                                                                                            • Men prefer new while women prefer used
                                                                                                                              • Stability when it comes to new and used choices
                                                                                                                                • Figure 58: Intention of purchasing a car/s in the next three years, 2017-19
                                                                                                                            • Preference for Fuel Types

                                                                                                                              • Alternatives to petrol show strong interest
                                                                                                                                • Figure 59: Preference for future fuel types, November 2019
                                                                                                                              • Young adults are an attractive target for new fuel types…
                                                                                                                                • …with older women a major challenge
                                                                                                                                  • Cities present good opportunities
                                                                                                                                    • New car owners should be a target market for emerging technologies
                                                                                                                                      • Hybrid and electric fuels see surge in interest
                                                                                                                                        • Figure 60: Preference for future fuel types, 2016-19
                                                                                                                                    • Car Purchasing Metrics

                                                                                                                                      • Price is dominant when choosing a brand
                                                                                                                                        • Figure 61: Purchasing metrics, November 2019
                                                                                                                                      • Men and women focus on different things
                                                                                                                                        • Older adults are the most demanding
                                                                                                                                          • City dwellers are open to new thinking
                                                                                                                                            • Used car owners are likely to be the most price conscious
                                                                                                                                            • Purchasing an Electric Car

                                                                                                                                              • Costs are important when considering an electric car
                                                                                                                                                • Figure 62: Purchasing an electric car, November 2019
                                                                                                                                              • Older drivers remain a key market to address
                                                                                                                                                • Urban areas are well placed for electric vehicles
                                                                                                                                                  • Wealthy buyers should not be overlooked
                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                              • Forecast table
                                                                                                                                                                • Figure 63: New and used car market sales, by volume, 2014-24

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