2021
9
UK Car Review Market Report 2021
2021-02-19T03:05:47+00:00
OX1042421
2195
134672
[{"name":"Automotive","url":"https:\/\/store.mintel.com\/industries\/transport\/automotive"}]
Report
en_GB
“The UK car market is currently passing through a difficult period. Falling sales since 2016 have been impacted further since 2020 by the COVID-19 pandemic. The result has been difficulties…

UK Car Review Market Report 2021

£ 2,195 (Excl.Tax)

Description

“The UK car market is currently passing through a difficult period. Falling sales since 2016 have been impacted further since 2020 by the COVID-19 pandemic. The result has been difficulties for both new and used sectors. Yet the car market continues to offer opportunities. Demand for hybrid and battery vehicles is growing as is interest in trading up and in vehicles that better fit evolving lifestyles.”

– Neil Mason, Retail Category Director

This Report looks at the following area:

  • The impact of COVID-19 on the UK car market.
  • How COVID-19 and factors such as the Brexit agreement might affect the direction of travel for the car market.
  • Recent developments in new/used sales, vehicle category and fuel preferences.
  • Key drivers impacting on the market and main channels used for purchasing.
  • Company and brand shares within the new car sector.
  • Consumer preferences towards types of car, innovations, channels for information and alternatives to car ownership.

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Impact of the January lockdown and the vaccination rollout
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on the automotive sector
      • Figure 1: Short, medium and long-term impact of COVID-19 on the car sector, February 2021
    • The market
    • Brexit and COVID-19 combine to wreak havoc on the market
      • Figure 2: UK new and used car sales, by volume, 2015-25
    • Slow recovery expected for the market
    • UK car parc continues to expand
    • Dual-purpose cars have been popular amongst buyers recently
    • Online set to benefit from COVID-19
    • Leisure is one of a number of important uses for a car
    • Companies and brands
    • Trading up unaffected by COVID-19 pandemic
    • Value brands also continue to see growth
    • COVID-19 sees realignment of channel spend
    • Many brands have unique positioning
    • The consumer
    • Easing of concerns associated with COVID-19 should assist car sales
      • Figure 3: Non-essential spending, April-December 2020
    • A quarter of adults aren’t car owners
      • Figure 4: Car ownership, November 2020
    • Dominance of used cars illustrates challenges for the new car sector
      • Figure 5: Age of car owned, November 2020
    • Age and income are key barriers to car ownership
      • Figure 6: Other access to cars, November 2020
    • Focus on small cars is likely to win business
      • Figure 7: Type of car owned, November 2020
    • Technology could act as a hook for older drivers
      • Figure 8: Interest in innovations, November 2020
    • Multiple channels should still be considered for promotion
      • Figure 9: Sources of information, November 2020
    • Only half of adults are interested in alternatives to car ownership
      • Figure 10: Alternatives to car ownership, November 2020
  3. Issues and Insights

    • COVID-19 set to both depress and alter demand for cars
    • Trade and Cooperation Agreement brings stability to UK car market
    • Interest in cars using alternative fuels set to dent SUV profile
  4. The Market – Key Takeaways

    • Action needed to overcome recent falling sales
    • Sizeable UK car parc remains a challenge for sellers
    • Smaller cars have the opportunity to re-assert their profile
    • Online has the potential to benefit from impact of COVID-19
    • Wide-ranging demands of many car owners shouldn’t be overlooked
  5. Market Size and Forecast

    • Automotive market badly affected by COVID-19 pandemic
      • Figure 11: Short, medium and long-term impact of COVID-19 on the car sector, February 2021
    • Used cars are growing their share of sales
      • Figure 12: New and used car sales, by volume, 2015 and 2020
    • AFVs are also up as demand for new diesel cars slumps
      • Figure 13: New car sales, by type, 2015 and 2020
    • Brexit and COVID-19 combine to create a difficult period for the market
    • Vaccinations and Brexit agreement offer growth opportunities …
    • …although new and used sales are unlikely to recover until 2023
      • Figure 14: UK new and used car sales, by volume, 2015-25 (prepared on 12 January 2021)
      • Figure 15: UK new and used car sales, by volume, 2015-25 (prepared on 12 January 2021)
    • New cars will improve their share slightly
      • Figure 16: New car sales, by new and used, 2021 and 2025
    • Cars powered by hybrid and battery technology will increasingly challenge petrol by 2025
      • Figure 17: New car sales, by type, 2021-25
    • Market drivers and assumptions
      • Figure 18: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 12 January 2021)
    • Learnings from the last recession
      • Figure 19: New car registrations, by volume, 2007-12
    • Forecast methodology
  6. Market Segmentation

    • Pandemic impacts on both new and used car sales during 2020
      • Figure 20: New and used car market volumes (UK), million units, 2015-20
    • Car parc in excess of 30% larger since 2000
      • Figure 21: Number of licensed cars (Great Britain), million units, 2000-19
    • Dual-purpose cars have been the big winner since 2015
      • Figure 22: New car registrations, by category, percentage point change, 2015-20
    • COVID-19 offers a boost for AFV sales…
      • Figure 23: Sales of new cars, by fuel type, 2015-20
    • …although they still account for a small share of the market overall
      • Figure 24: Number of licensed cars (Great Britain), by fuel type, million units, 2015-20
    • Older cars are also growing their profile
      • Figure 25: Age structure of the UK car parc in years, 2015-19
    • A growing percentage of households now own two or more vehicles
      • Figure 26: Percentage of households with car availability, England, 2009-19
    • Car ownership increases outside of urban areas
      • Figure 27: Household car ownership per household, by rural-urban classification (England), 2018/19
  7. Channels to Market

    • Franchised dealers dominate
      • Figure 28: Sales of cars, by channel, 2016-20
    • Profile of online looks set to strengthen following COVID-19
  8. Market Drivers

    • Consumer confidence impacted during 2020 by COVID-19 pandemic
      • Figure 29: Consumer financial confidence, January 2020-January 2021
    • Brexit agreement should minimise further economic disruption
    • Older men are more likely to hold a driving licence
      • Figure 30: Full car driving licence holders, by age and gender, England, 2019
    • Cars are the preferred mode of transport for journeys of more than a mile
      • Figure 31: Mode share of trips, by main mode (different trip lengths), England, 2019
      • Figure 32: Car transport, Great Britain, March-December 2020
    • Steady demand for using a car three or more times a week
      • Figure 33: Frequency of using a private car, England, 2009 and 2019
    • Leisure is a key use for a car
      • Figure 34: Trips, by purpose per year, private car *, England, 2009 and 2019
    • Cost pressures for car owners have moderated recently
      • Figure 35: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2015-19
    • Over half of adults plan to buy a car in the next three years
      • Figure 36: Intention of purchasing a car/s in the next three years, November 2020
    • Around half of buyers will purchase new in the next three years
      • Figure 37: Intention of purchasing a car/s in the next three years, by new or used/second-hand purchase, November 2020
    • Growing restrictions on using a car in urban areas
  9. Companies and Brands – Key Takeaways

    • Digital is a major benefactor of reduced promotional spend
    • Polarisation of market towards premium and value continues despite COVID-19
    • Strong positioning is essential for a brand’s success
  10. Market Share

    • European brands continue to suffer
    • Premium brands continue to perform well
    • Value brands also proving popular
      • Figure 38: Manufacturer shares of new car registrations, 2014-20
    • Supermini format increasingly popular
      • Figure 39: Top 10 new car models, 2018-20
    • Fragmentation evident amongst used car brands
      • Figure 40: Top 10 used car models, 2018-20
  11. Launch Activity and Innovation

    • INTVO pedestrian detection for self-driving cars
    • V2X Network offers a platform for autonomous data transactions
    • Volvo and indoor car air quality
      • Figure 41: Volvo Advanced Air Cleaner
    • Apostera offers augmented reality for drivers
  12. Advertising and Marketing Activity

    • Advertising support sees steady decline since 2016
      • Figure 42: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2016-20
    • Spring 2020 lockdown results in sizeable fall in investment
      • Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, by month, 2019 and 2020
    • Increasing focus on promoting AFVs
      • Figure 44: Recorded above-the-line, online display and direct mail total advertising expenditure, by type of car, 2016-20
    • Most manufacturers have scaled back investment recently
      • Figure 45: Recorded above-the-line, online display and direct mail total advertising expenditure, by leading car manufacturers, 2016-20
    • COVID-19 redirects spend towards certain media
      • Figure 46: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2019 and 2020
    • Nielsen Ad Intel coverage
  13. Brand Research

    • Ford outpaces premium German marques when it comes to trust
      • Figure 47: Attitudes towards and usage of selected brands, November 2020
    • Key brand metrics
      • Figure 48: Key metrics for selected brands, November 2020
    • Brand attitudes: Hyundai and Kia are associated with offering good value
      • Figure 49: Attitudes, by brand, November 2020
    • Brand personality: Vauxhall suffers from being boring, VW as being unethical
      • Figure 50: Brand personality – macro image, November 2020
    • Brand personality: Micro image analysis illustrates specific strengths and weaknesses
      • Figure 51: Brand personality – micro image, November 2020
  14. The Consumer – Key Takeaways

    • Easing of worries associated with COVID-19 should stimulate car sales
    • Targeting the quarter of adults who aren’t car owners shouldn’t be overlooked
    • Sellers should ensure that they have a strong used focus
    • Addressing issue of price could stimulate those without a car
    • A focus on small cars is likely to win business
    • Technology could act as a hook for older drivers
    • A broad channel strategy will help with the important over-35 age group
    • Targeting affluent adults shouldn’t be overlooked by those offering alternatives to car ownership
  15. Impact of COVID-19 on Consumer Behaviour

    • Fewer adults are worrying about the risks associated with COVID-19
      • Figure 52: Worries about risk of exposure to COVID-19, April-December 2020
    • Fall in those who are shunning non-essential spending
      • Figure 53: Non-essential spending, April-December 2020
  16. Car Ownership

    • Three quarters of adults are car owners
      • Figure 54: Car ownership, November 2020
    • Income is a major factor affecting car ownership
    • Growing number of adults own a car
      • Figure 55: Car ownership, 2016-20
  17. Age of Car Owned

    • Purchasing used is currently preferred over new
      • Figure 56: Age of car owned, November 2020
    • Older adults less likely than other groups to have purchased recently
    • Men are important buyers of new cars
    • Income plays a major role in the new car market
    • New cars are popular for city dwellers
    • Slowdown in demand for new cars is increasingly evident
      • Figure 57: Age of car owned, 2016-20
  18. Other Access to Cars

    • Most non-car owners don’t have a driving licence
      • Figure 58: Other access to cars, November 2020
    • Young adults are most likely to not hold a driving licence…
    • …with income also a factor
    • Potential market for car purchasers is significant
  19. Type of Vehicle Owned

    • Small-format cars are the most popular choice amongst owners
      • Figure 59: Type of car owned, November 2020
    • Small cars are popular with women…
    • …with young adults another important market
    • Wealthy favour large and luxury vehicles
    • Older adults have potential to maintain SUVs’ profile
    • Recent new car purchasers are going small and adding value
    • Car owners increasingly want something different
      • Figure 60: Type of car owned, 2016- 20
  20. Interest in Innovations

    • Parking assistance is the most popular innovation sought
      • Figure 61: Interest in innovations, November 2020
    • Older adults seek out safety features
    • Men looking for assistance with day-to-day driving
    • Self-parking is popular for city dwellers
    • New car owners show interest in specialist innovations
    • SUV owners want it all
    • Affluent and older adults are most interested in innovations
  21. Sources of Information

    • Half of adults would rely on digital media for information
      • Figure 62: Sources of information, November 2020
    • Young adults seek out a variety of channels
    • Digital and television are popular with specific groups
    • New car owners seek out a broad range of channels
    • Interest in printed media is low for those without a car
    • Digital is becoming increasingly popular
      • Figure 63: Sources of information, 2017-20
  22. Alternatives to Car Ownership

    • Car hire is the most popular alternative to ownership
      • Figure 64: Alternatives to car ownership, November 2020
    • Young adults show the strongest interest in alternatives
    • Young men prefer car hire, young women car sharing
    • Affluence is also a factor
    • Difficulties with car ownership make urban areas an attractive market
    • Non-car owners interested in informal access
    • New car owners are an important target group
    • Those driving the smallest cars are favourable to alternatives
    • Interest in use of car hire is growing as other methods falter
      • Figure 65: Alternatives to car ownership, 2015-20
  23. Appendix – Data Sources, Abbreviations and Supporting Information

    • Data sources
    • Market sizing and segment performance
    • Abbreviations
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

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Data

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*databooks not available with UK B2B Industry reports.

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