2022
9
UK Vehicle Recovery Market Report 2022
2022-09-08T04:08:16+01:00
OX1102585
2195
155533
[{"name":"Automotive","url":"https:\/\/store.mintel.com\/industries\/transport\/automotive"}]
Report
en_GB
“Challenges continue for the vehicle recovery services market as the cost of living crisis, and associated inflationary pressures, place pressure on this sector to raise prices. With new car sales…

UK Vehicle Recovery Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Vehicle Recovery Market Report identifies consumers’ attitudes towards vehicle recovery policies, the impact of the cost of living crisis, and membership developments in the vehicle recovery market. This report covers the vehicle recovery size, market forecast, market segmentation and industry trends in the UK vehicle recovery market.

 

Current Landscape of the Vehicle Recovery Market

Assisted by the push towards purchasing virtually during the recent COVID-19 pandemic, Mintel’s vehicle recovery market research identifies that online remains an area that is seeing the strongest growth in the vehicle recovery services market.

The impact of the cost of living crisis is set to be significant on the market since rising prices for oil and other materials are expected to feed through to higher premiums. The tightening of household budgets will likely influence consumers to trade down within the vehicle recovery market.

 

UK Vehicle Recovery Market Share and Key Industry Trends

The current cost-of-living crisis is only expected to compound the difficulties automotive manufacturers face, with many consumers scrutinizing prices. However, big players can harness opportunities in the vehicle recovery market by providing adding value to what they offer to attract purchasers, such as loyalty schemes, servicing or maintenance.

  • 35% of UK car owners bought their breakdown cover online.
  • 67% of UK consumers consider service reliability as an important aspect of their cover.
  • 77% of UK car owners would be interested in a loyalty discount from their breakdown providers.
  • 51% of UK consumers would be interested in additional services from their provider (servicing, maintenance).

 

Future Trends in the UK Vehicle Recovery Services Market

The growing profile of the electric vehicle market creates new opportunities for the vehicle recovery market. Several service providers are already adjusting their offers to meet the specific demands of EV car owners, ranging from particular support that cars may need during use to support while at home. Building policies that reflect the ‘green’ credentials of B-EV owners could be an additional step in further supporting this sector.

Read on to discover more about the UK High Street Retail Market, take a look at our other Automotive Market Research.

 

Quickly Understand

  • The impact of COVID-19, and the cost-of-living crisis on the UK vehicle recovery services market.
  • Recent developments in premiums and memberships within the vehicle recovery services market.
  • Specific developments by average price, type of policy and channel used.
  • Key drivers impacting the UK roadside assistance market.
  • Consumer preferences by company, how policies are purchased, and the importance of customer service factors.
  • Explores the vehicle recovery market size and breakdown recovery market share.

 

Covered in this Report

Products: Vehicle recovery services.
Brands:  RAC, AA, Direct Line Group, Start Rescue, Green Flag, Allianz Assistance, AXA, LV.

 

Expert Analysis from a Specialist in the Field

This report, written by Neil Mason, a leading analyst in the Retail sector, delivers in-depth commentary and analysis to highlight current trends in the vehicle recovery market and add expert context to the numbers.

Challenges continue for the vehicle recovery services market as the cost of living crisis, and associated inflationary pressures, place pressure on this sector to raise prices. With new car sales set to remain sluggish during the short-term, better opportunities are likely to be found amongst owners of used vehicles as well as owners of electric cars. In both cases, refreshed strategies will be needed by service providers to fully exploit these markets.”

Neil Mason
Retail Category Director

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Market context
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for vehicle recovery services
      • Figure 1: Vehicle recovery services outlook, 2022-27
    • The market
    • Inflationary pressures are expected to act as a major driver for revenue growth
      • Figure 2: Market size and forecast for the vehicle recovery market, 2017-27
    • Memberships record growth in 2021 and 2022
      • Figure 3: Vehicle recovery services market, membership, 2017-22
    • Policy prices recover after pandemic pressures
      • Figure 4: Average premium paid, 2017-22
    • Fully comprehensive policies are still preferred
      • Figure 5: Segmentation of the vehicle recovery market (value), by policy type, 2021
    • Popularity of direct purchase emphasises importance of direct communication with customers
      • Figure 6: Segmentation of the vehicle recovery market (value), by direct/indirect channels, 2020
    • Opportunities with older vehicles strengthens
      • Figure 7: Age structure of the UK car parc in years, 2017-21
    • Companies and brands
    • Whilst the RAC now has more memberships, the AA dominates when it comes to value
      • Figure 8: Company shares of the vehicle recovery market, by premium and membership, 2022 (est)
    • Segmentation continues to be used to segment market and target particular groups
    • Focus on B-EV sector dominates innovation
    • Advertising support rebounds in 2021 after a difficult 2020
      • Figure 9: Total above-the-line, online display and direct mail advertising expenditure on breakdown recovery, 2017-22
    • It’s all about positioning and differentiation
      • Figure 10: Attitudes towards and usage of selected brands, 2022
    • The consumer
    • AA continues to dominate the market.
      • Figure 11: Ownership of breakdown cover, by recovery organisation, 2022
    • Online is essential, as are cross-selling links
      • Figure 12: Key means by which current breakdown cover for your main vehicle was acquired, 2022
    • Vehicle recovery companies need to deliver on their promises
      • Figure 13: Importance of customer service factors, 2022
    • Focusing on the basics is a key demand for policyholders
      • Figure 14: Attitudes towards vehicle recovery insurance, 2022
  3. Issues and Insights

    • Economic uncertainties are expected to exert new pressures on the market
    • Growth in profile of B-EVs set to change demands from drivers
    • Online offers opportunities for smaller service providers
  4. Market Size and Performance

    • Recent slowdown in car market fails to dent revenue growth
      • Figure 15: UK vehicle recovery services market, membership revenues including IPT, 2017-22
    • Membership growth slows as pandemic and economic difficulties impact market
      • Figure 16: UK vehicle recovery services market, membership, 2017-22
  5. Market Forecast

    • Cost-of-living pressures will exert short-term impact on the market
      • Figure 17: Vehicle recovery services outlook, 2022-27
    • Inflationary pressures are set to boost revenues
      • Figure 18: UK vehicle recovery services market, membership revenues including IPT, 2017-27
    • Future expenditure plans of consumers will be significant in the future direction of the market
    • Learnings from the last economic slowdown
      • Figure 19: The vehicle recovery market, by value, 2007-12
    • Forecast methodology
  6. Market Segmentation

    • Cost-of-living squeeze offers potential to grow ad hoc memberships
      • Figure 20: Segmentation of the vehicle recovery market, by value, at current prices, 2017-22
    • Rising average premiums, a feature of the market
      • Figure 21: Average premium paid, 2017-22
    • Comprehensive policies remain popular with buyers
      • Figure 22: Segmentation of the vehicle recovery market (value), by policy type, 2021
    • Around a third of policies are purchased indirectly
      • Figure 23: Segmentation of the vehicle recovery market (value), by direct/indirect channels, 2021
  7. Channels to Market

    • Online gains over all other channels
    • Acquiring insurance for free continues to dominate
      • Figure 24: Key channels used for purchasing breakdown recovery insurance, 2018-22
  8. Market Drivers

    • Inflation is the key concern for consumers and brands…
      • Figure 25: Unleaded and Diesel fuel prices (including duty and VAT), 2020-22
    • … and will weigh down the post-COVID recovery
    • Consumer spending power will be curbed
    • The conflict in Ukraine is hurting the UK economy in a number of ways
    • Employment has held up better than expected
    • Consumers’ financial wellbeing has fallen from the highs of 2021…
      • Figure 26: Household financial wellbeing index, 2016-22
    • …and most people are feeling the effects of price rises
    • Used cars record much stronger performance than the new car sector
      • Figure 27: New and used car market volumes (United Kingdom), million units, 2017-22
    • Ageing of UK car parc offers further potential
      • Figure 28: Age structure of the UK car parc in years, 2017-21
    • Long-term predictions are for a fall in the size of the car parc
      • Figure 29: Car parc (UK) forecast, central scenario, 2020-35
    • Alternative fuelled vehicles set to capture over a third of sales in 2022
      • Figure 30: Sales of new cars by fuel type, 2017-22
    • The future’s electric
      • Figure 31: Sales of new AFV cars by type, 2017-22
  9. Market Share

    • RAC and AA vie for leadership
      • Figure 32: Company shares of the vehicle recovery market, by membership, 2016-22
    • Call Assist and Allianz lead smaller rivals
      • Figure 33: Share of those outside of the big three (RAC, AA, Direct Line Group), by UK membership, 2016-22
    • AA benefits from higher average premiums
      • Figure 34: Company shares of the vehicle recovery market, by value, 2016-22
  10. Competitive Strategies

    • Segmentation continues as key way to carve out the market
      • Figure 35: Segmentation variables by vehicle recovery company (leading seven providers by membership), 2022
    • Service differentiation is becoming more complex
    • Use of discounts for a ‘light’ service
    • Additional savings are possible by adjusting how you pay for assistance
    • Recommendations are important
      • Figure 36: Independent recommendations (leading seven providers by membership), 2022
    • Price is an important tactical tool at time of purchase
      • Figure 37: Use of price (leading seven providers by membership), new customers, 2022
    • Partnerships are crucial for success
    • AA and RAC well placed with OE manufacturers
    • Green Flag is a notable player within the financial sector
      • Figure 38: Packaged current accounts that offer breakdown cover (new customers), 2022
    • RAC has a strong presence in the retail sector
      • Figure 39: Supermarkets that offer breakdown cover, 2022
  11. Launch Activity and Innovation

    • B-EV breakdown van piloted by RAC
      • Figure 40: RAC Renault Zoe Van, January 2022
    • RAC partners with Zap-Map to promote its B-EV charging map
      • Figure 41: RAC Zap-Map app, March 2022
    • Green Flag targets the very youngest drivers with its recycling initiative
    • Rescue Mate offers Uber-style support
    • LV=Britannia offers dedicated B-EV support in central London
      • Figure 42: LAR Traffic Services partnership with LV Britannia, August 2021
  12. Advertising and Marketing Activity

    • Expenditure increases after a difficult 2020
      • Figure 43: Total above-the-line, online display and direct mail advertising expenditure on breakdown recovery, 2017-22
    • AA dominates advertising spend
      • Figure 44: Recorded above-the-line, online display and direct mail total advertising expenditure on breakdown recovery, by advertiser, 2018-22
    • Television accounts for the majority of spend
      • Figure 45: Recorded above-the-line, online display and direct mail total advertising expenditure on breakdown recovery, by media type, 2018 and 2022
    • Nielsen Ad Intel coverage
  13. Brand Research

    • Brand map
      • Figure 46: Attitudes towards and usage of selected brands, 2022
    • It’s all about awareness and experience
      • Figure 47: Key metrics for selected brands, 2022
    • Brand attitudes: Price and non-price factors distinguish the big 3
      • Figure 48: Attitudes, by brand, 2022
    • Brand personality: Direct Line is seen as similar to the big three
      • Figure 49: Brand personality – macro image, 2022
    • Brand personality: AA and RAC are seen as reliable whilst Green Flag as affordable
      • Figure 50: Brand personality – micro image, 2022
  14. Presence of Breakdown Recovery Organisations

    • AA records the highest presence amongst car owners
      • Figure 51: Ownership of breakdown cover, by recovery organisation, 2022
    • AA and RAC appeal to different age groups and sexes
    • AA’s appeal with city dwellers is a challenge for the RAC
    • Smaller providers well placed with rural car owners
    • RAC makes good progress in challenging the AA
      • Figure 52: Ownership of breakdown cover, by recovery organisation, 2017-22
  15. How Cover is Acquired

    • Online accounts for over a third of purchases
      • Figure 53: Key means by which current breakdown cover for your main vehicle was acquired, 2022
    • Men and wealthy individuals are looking for a freebie
    • Online holds good prospects with women…
    • …as well as those with smaller companies
    • Online and bundling are proving increasingly popular
      • Figure 54: Key means by which current breakdown cover for your main vehicle was acquired, 2020-22
  16. Importance of Customer Service

    • Reliability is one of three key service factors sought
      • Figure 55: Importance of customer service factors, 2022
    • Women and older adults have broad demands
    • Young adults and families focus on physical evidence
    • Reliability is the most important factor overall
      • Figure 56: Most importance customer service factor, 2022
    • Young men want to keep it personal
    • Going beyond advertising in urban areas
    • Opportunities exist for smaller companies to target particular demands
  17. Attitudes towards Vehicle Recovery Services

    • Policyholders want thing personal
      • Figure 57: Attitudes towards vehicle recovery insurance, 2022
    • A service package targeted at young adults?
    • Specific services for urban motorists
    • Additional services could appeal to new car owners looking for a discount
    • Importance of factors when thinking about vehicle recovery – CHAID analysis
    • Women are interested in the idea of using a local garage
      • Figure 58: Interest in benefits from vehicle recovery insurance – CHAID – Tree output, June 2022
      • Figure 59: Interest in benefits from vehicle recovery insurance – CHAID – Table output, June 2022
  18. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  19. Appendix: Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 60: Market forecast and prediction intervals for the vehicle recovery market, 2022-27
    • Market drivers and assumptions
      • Figure 61: Key drivers affecting Mintel’s market forecast, 2021-26
    • Forecast methodology

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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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