2025
9
UK Car Industry Review 2025
2025-02-20T18:00:48+00:00
REPDA9056E0_2B67_4815_8415_A14AFB0030C2
2195
179654
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Report
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The UK car market is undergoing significant shifts, shaped by evolving consumer preferences and broader economic challenges. Inflation/supply chain disruptions have influenced buying behaviour, driving increased demand for small and…

UK Car Industry Review 2025

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UK Car Industry Review

UK car market analysis indicates an industry undergoing significant shifts, shaped by evolving consumer preferences and broader economic challenges. Inflation/supply chain disruptions have influenced buying behaviour, driving increased demand for small and medium-sized cars due to their affordability/lower maintenance costs. In 2024, these cars captured 53% of total sales.

UK Car Industry Trends

Mintel’s car market review shows that used cars accounted for nearly 80% of all sales, as cost-conscious buyers prioritised savings and took advantage of greater availability. For today’s car buyers, price and quality remain the top priorities, with 50% and 47% respectively identifying these factors as most important.

Interest in electric and hybrid vehicles continues to grow, though widespread adoption faces obstacles, i.e. affordability and infrastructure limitations. Fuel efficiency and eco-friendly features resonate with 39%, highlighting a rising desire for sustainable and efficient transportation options.

When it comes to ownership preferences, nearly 60% of buyers favour outright ownership, opting for cash payments or loans. Alternative models like short-term rentals, car sharing, or car club memberships remain niche, appealing to only 10% of adults.

Digital platforms have become the leading source of information for buyers, with 46% relying on online resources – outpacing traditional mediums like television and print.

UK Car Industry Review – What’s Inside?

Key Topics Analysed in the Report

  • Opportunities emerging from the growing popularity of small and medium cars.
  • Important factors driving car purchasing decisions, including price, quality, fuel efficiency, driving experience, environmentally friendly features, and cutting-edge innovation.
  • Key recommendations for players to thrive in the market related to ownership preferences such as buying outright, leasing, as well as short-term rentals, car sharing, and car club memberships.
  • In-depth analysis of communication channels, i.e. digital and traditional mediums like TV, print, and outdoor advertising, highlighting the most effective methods of engagement to achieve maximum audience reach.
  • With the rapid evolution of the electric/hybrid car market, the change in government policies, incentives, recent updates, and their broader implications.

Report Scope

This Report investigates the changing face of the UK car market. It focuses on developments that are taking place within the car market and how these are impacting now and are likely to impact on the future demands of buyers. It presents a review of the UK market for passenger vehicles and the dynamics of the sector, as well as reviewing trends in areas such as category and brand share.

It is exclusively focused on passenger vehicles, and therefore excludes any discussion of the market for light commercial vehicles.

This Report specifically excludessales to businesses or operators of company car fleets although data for sales to all three markets is included where necessary.

Meet the Expert Behind the Analysis

This report was written by Utku Tansel. Utku is a member of the European Retail Team and responsible for research and writing reports/content. He has almost two decades of success in driving global thought leadership, project/content management experience delivering strategic business intelligence and actionable insight to major multinational companies.

The UK car market is shifting, with growing demand for small/medium cars, and interest in electric/hybrids. Price and quality remain key priorities for buyers.

Utku Tansel, Senior Retail AnalystUtku Tansel
Senior Retail Analyst

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  1. EXECUTIVE SUMMARY

    • Opportunities for the UK car sector
    • Rising stars: the growing demand for small and medium cars
    • Driving sustainability and style: how auto brands can stand out
    • Leverage car leasing options
    • What drives car buyers? Price meets quality
    • Graph 1: importance of factors when owning a car, 2024
    • Driving success: how car brands can win with affordability and quality
    • Driving sales in the digital age: how car retailers can win online
    • Driving sales: winning with digital ads and influencer partnerships
    • Market dynamics and outlook
    • Market size & forecast
    • Market Outlook for the car sector
    • Market forecast – volume
    • Used cars dominate with almost 80% of total sales
    • Graph 2: new and used car sales, share of volumes, 2018 and 2024
    • Electric power surges ahead as petrol and diesel decline
    • Graph 3: new car registrations, by share of fuel type, 2018, 2023, and 2024
    • EVs hit a record market share: a milestone for sustainable cars
    • Graph 4: new cars market share, %, 2024
    • What consumers want and why
    • Small- and medium-sized cars rise in popularity
    • Graph 5: type of car owned, 2024
    • Price and quality drive car buyers’ decisions
    • Graph 6: most important factors when buying a car, 2024
    • Buying outright still reigns supreme
    • Graph 7: ways of accessing a car, 2024 vs 2023, %
    • Nearly half of adults still turn to digital channels for information
    • Graph 8: preferred methods of communication, 2023 vs 2024
    • Driving into the future: automated diagnostics most appealing
    • Graph 9: interest in the enhanced vehicle features, 2024
    • Advertising and Marketing
    • Jaguar’s rebrand focuses on creativity
    • Hyundai asks “Where Have You Been?” in a humorous and creative campaign
    • Renault 5 won the European Car of the Year (COTY) award for 2025
  2. Market Dynamics

    • Market size
    • Car sales shift into higher gear
    • Graph 10: new and used car sales, by volume, 2019-24
    • Used cars dominate: 80% of sales in 2024
    • The rapid rise of alternative fuel vehicles at the expense of petrol and diesel
    • Breaking barriers: tackling cost, infrastructure, and confidence in the EV revolution
    • Accelerating the UK’s electric adoption
    • Market forecast
    • Market forecast – volume
    • Driving the future
    • Market segmentation
    • All AFV segments surge ahead: the shift away from fossil fuels
    • Graph 11: new car registrations, 2023 and 2024
    • Used cars dominate with almost 80% of total sales
    • Graph 12: new and used car sales, share of volumes, 2018 and 2024
    • Revved up: used car sales on the rise
    • Graph 13: used car sales, 2016 – 2024
    • UK new car market grows in 2024
    • Petrol and diesel decline…
    • Graph 14: new car registrations, by share of fuel type, 2018, 2023, and 2024
    • …while the weight of electrified powertrains surge
    • EVs hit a record market share: a milestone for sustainable cars
    • Graph 15: new cars market share, %, 2023
    • Graph 16: new cars market share, %, 2024
    • Driving forward: discounts and better batteries fuel the B-EV boom
    • Market share
    • Luxury rises and EV demand soars: top automotive brands and best-selling cars of 2024
    • Volkswagen continues to lead
    • Graph 17: brand share, new cars, leading 10 brands, 2023 and 2024
    • Top automakers continue to innovate in the evolving market
    • Distribution channels
    • Dealers remain the preferred route for purchasers
    • Graph 18: where last car was purchased, top 3 channels, 2024
    • Online options: automotive sales websites preferred over other channels
    • Graph 19: where car was last purchased, online options, 2020-24
    • Market drivers
    • Falling inflation has reduced pressure on household finances
    • Graph 20: CPI* inflation rate, 2021-24
    • Consumer confidence outlook
    • Graph 21: consumers’ financial confidence over the next year or so, 2025
    • Fuel prices down but remain above those seen during the pandemic
    • Graph 22: unleaded petrol and diesel pump prices, Jan 2021 – Feb 2025
    • UK to phase out petrol and diesel cars by 2030: driving the zero-emission future
    • Norway’s EV strategy: incentives over bans – a lesson for the UK and EU
    • UK invests £65m in EV charging revolution with connected kerb
    • How US Tariffs could shake up the UK market
  3. WHAT CONSUMERS WANT AND WHY

    • Type of vehicle owned
    • Small- and medium-sized cars rise in popularity
    • Graph 23: type of car owned, 2023 vs 2024
    • Small cars, big comeback: compact vehicles are thriving in a tech-driven world
    • Smaller cars remain the preferred choice among women
    • Graph 24: small saloon/hatchback (eg Ford Fiesta, Vauxhall Corsa) car ownership, by gender, 2024
    • SUVs most popular in village/rural areas
    • Executive and luxury cars attractive to ethnic minorities
    • Sports cars appeal to young male consumers
    • Important factors when choosing a car
    • Price and quality drive car buyers’ decisions
    • Graph 25: most important factors when buying a car, 2024, %
    • Price is key…
    • Graph 26: most important factors when buying a car – overall price, by age, 2024, %
    • …but not at the expense of quality
    • Emphasise quality as consumers rethink value
    • Fuel efficiency drives almost 40% of car buyers’ decisions
    • Buyers want their car to be enjoyable to drive
    • Time meets speed: the Jaguar x Bremont collaboration
    • Luxury meets lifestyle
    • Innovation is important to younger cohort
    • Tech shapes young consumers’ brand choices
    • Ways of accessing a car
    • Buying outright still reigns supreme
    • Graph 27: ways of accessing a car, 2023 and 2024
    • Overwhelming majority opt for purchase and outright ownership
    • Car leasing: a look at age, income, and family dynamics
    • Graph 28: ways of accessing a car – fixed term lease (ie pay monthly with option to purchase or return car at end of lease term), select groups, 2024
    • Young buyers present promising opportunities for innovative car ownership solutions
    • Graph 29: select ways of accessing a car, 2024
    • Preferred methods for communication
    • Nearly half of adults still turn to digital for information
    • Graph 30: preferred methods of communication, 2023 vs 2024
    • Technology and authenticity are transforming UK advertising
    • Prioritise digital but…
    • Graph 31: digital (eg email, internet) preferred methods of communication, by select groups, 2024
    • …not at the expense of traditional mediums
    • Driving engagement: creative strategies for smarter digital advertising
    • Targeting the right screen: TV still matters
    • Graph 32: TV as a preferred methods of communication, by select groups, 2024
    • Outdoor advertising on the rise: unlocking urban prospects
    • Graph 33: outdoor advertising (eg billboards etc) as a preferred method of communication, by select area, 2024
    • Car buyers shifting gears: personal research trumps ads in 2024
    • Graph 34: preferred methods of communication, select channels, 2023 and 2024
    • Interest in specific in-vehicles technologies
    • Driving into the future: automated diagnostics most appealing
    • Graph 35: interest in the enhanced vehicle features, 2024
    • The road ahead: how automated diagnostics are revolutionising in-car tech
    • Driving innovation: how in-car technology shapes car buying decisions
    • Convenience is king: the rise of gesture and voice control
    • CES 2025: self-driving cars, AI-powered innovations, and the future of automotive tech
  4. ADVERTISING AND MARKETING ACTIVITY

    • Car Ad spend trends: £321m invested in 2024*
    • Graph 36: recorded above-the-line, online display and direct mail total advertising expenditure on cars, 2020-24*
    • Dual-purpose cars lead 2024 ad spend as superminis overtake the competition
    • Graph 37: recorded above-the-line, online display and direct mail total advertising expenditure on cars, by category, 2024*
    • Top 10 leading advertisers in cars
    • Jaguar’s rebrand focuses on creativity
    • Hyundai asks “Where Have You Been?” in a humorous and creative campaign
    • Volkswagen builds on nostalgia
    • Volvo’s “Moments That Never Happened” ad hits an emotional note
    • Mercedes utilises storytelling to showcase autonomous driving features
    • Renault 5 won the European Car of the Year (COTY) award for 2025
    • Dacia Duster ad highlights advanced tech capabilities
    • TV remains the top channel
    • Graph 38: percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure on cars, by media, 2022 and 2024*
  5. APPENDIX

    • Market forecast data and methodology
    • Market forecast and prediction intervals (volume)
    • Forecast methodology
    • Advertising by company
    • How top car brands invested big in advertising
    • Report scope and definitions
    • Market definitions and exclusions
    • Data sources
    • Abbreviations and terms
    • Methodology
    • Consumer research methodology
    • Nielsen Ad Intel Coverage

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