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UK Car Review market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Car Review market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

What you need to know

After a period of expanding sales the UK car market is entering a difficult period. New car volumes fell back in 2017 (-1.4%) with this decline set to continue into 2018. Although the used car market remains strong, with sales outstripping those of new models, Mintel’s research suggests that a slowdown is likely with a stagnation in demand evident in 2017.

Since the EU Referendum vote in June 2016 much of the concern of those in the market has been that processes associated with Brexit are beginning to impact on sales. Yet analysis of the sector, and what drives it, reveals a more complex situation. Rising costs and growing consumer uncertainty appear to have combined with what was an increasingly saturated new car market to bring about the current difficulties for the sector. Although future worries about Brexit are certainly playing their part in depressing demand, the market is considerably more complex to be affected by a single issue.

Against such a backdrop the car market continues to benefit from a number of internal developments. Most notable is the movement away from the idea of a multi-purpose car to a car that offers specific benefits and meets specific demands such as versatility, luxury or value. Trading up is a key feature of the market and has recently benefitted a number of international, principally German, manufacturers to the detriment of UK and other European suppliers. Technology is finding its way into the UK car market as cars increasingly mirror what is happening in society. Hybrid and electric power sources appear to have finally emerged as a realistic alternative to diesel or petrol as the sector continues to ‘green-up’ its image.

Strong new car sales in recent years have led to growth in demand with Mintel’s research suggesting that 22% of car owners now own a car purchased from new within the last two years. When it comes to new buyers interest is strongly focused on sectors such as SUVs (Sports Utility Vehicles) as well as executive cars. Uses to which cars are put vary although Mintel’s research suggests that shopping, commuting and visiting friends/ family are overall the most important.

Products covered in this Report

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 or fleet vehicles.

Expert analysis from a specialist in the field

Written by Neil Mason, a leading analyst in the Automotive sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

After a period of growth the UK car market has begun to enter a period of stability. New sales are in decline while the used market has stagnated. Yet within the market change continues. Owners are increasingly looking for a more bespoke vehicle with a growing percentage also looking for a car to match their lifestyle. Neil Mason
Head of Retail Research

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Table of contents

  1. Overview

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

          • The market
            • Car market showing signs of stagnation
              • Figure 1: UK new and used car sales, by volume, 2012-22
            • Slowdown in sales is evident in both segments of the market
              • Figure 2: New and used car market volumes, 2012-17
            • Dual and multipurpose vehicles are growing their share of the market
              • Figure 3: New car registrations by broad segment (share), 2012 and 2017
            • Costs of motoring are rising
              • Figure 4: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2012 and 2016
            • Companies and brands
              • Established manufacturers are losing ground
                • Not all brands are viewed equally
                  • Figure 5: Attitudes towards and usage of selected brands, January 2018
                • Advertising spend also showing evidence of stagnation
                  • Innovation remains a key area for manufacturers
                    • The consumer
                      • Car ownership stands at 70%
                        • Figure 6: Car ownership, December 2017
                      • Used cars represent a larger part of the market
                        • Figure 7: Age of car owned, December 2017
                      • Most adults who don’t own a car also don’t drive
                        • Figure 8: Non-car ownership, December 2017
                      • Small and medium-sized vehicles are popular
                        • Figure 9: Type of Car Owned, December 2017
                      • Shopping is the most important use for a car
                        • Figure 10: Reasons for using a car, December 2017
                      • Digital dominates as a source of information
                        • Figure 11: Sources of information, December 2017
                      • Car hire and car sharing are the popular alternatives
                        • Figure 12: Alternatives to car ownership, December 2017
                      • What we think
                      • Issues and Insights

                        • 2017 sees new car market volumes decline as used sector stalls
                          • The facts
                            • The implications
                              • SUVs/4x4 cars are set to continue to grow their share of the market
                                • The facts
                                  • The implications
                                    • Digital as a communication channel shouldn’t be overlooked
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • After peaking in 2016 new and used car sales are now in decline
                                            • New car sales have been hit hardest by slowdown in demand
                                              • Levels of car ownership are growing strongest in the North of England
                                                • Despite a falling share of new car sales, diesel continues to grow its overall share
                                                  • Franchised dominate as the most important sales channel
                                                    • Costs of motoring spiral upwards during 2016
                                                    • Market Size and Forecast

                                                      • After peaking in 2016 sales will start to fall back in 2017
                                                        • Figure 13: UK new and used car sales, by volume, 2012-22
                                                        • Figure 14: Best- and worst-case forecasts for UK new and used sales, 2012-22
                                                      • Forecast methodology
                                                      • Market Segmentation

                                                        • Stagnation begins to impact on both new and used segments
                                                          • Figure 15: New and used car market volumes, 2012-17
                                                        • Nearly a quarter of cars on the road are now 10 years or older
                                                          • Figure 16: Age structure of the car parc in years, 2012, 2014 and 2016
                                                        • Two thirds of households own two or more cars
                                                          • Figure 17: Percentage of households with car availability, in England, 2006-16
                                                        • Car ownership growing strongest in the North of England
                                                          • Figure 18: Household car ownership by region (England), 2002/03 and 2014/15
                                                        • Dual and multipurpose vehicles benefit from increased interest …
                                                            • Figure 19: New car registrations, by broad segment, 2012-17
                                                          • … accounting for over a fifth of new car sales in 2017
                                                            • Figure 20: New car registrations by broad segment (share), 2012-17
                                                          • Dual purpose is clear winner as a number of other categories fall out of favour
                                                            • Figure 21: New car registrations by category, 2010, 2015 and 2016
                                                          • Concerns about diesel sees surge in demand for petrol …
                                                            • Figure 22: Sales of new cars by fuel type, 2012-17
                                                          • … although diesel continues to grow its share overall
                                                            • Figure 23: Fuel use within the car parc, 2012-16
                                                        • Channels to Market

                                                          • Franchised dealers benefit from recent buoyant new car sales
                                                            • Figure 24: Sales of new and used cars, by channel, 2013-17
                                                        • Market Drivers

                                                          • Men are more likely to hold a driving licence
                                                            • Figure 25: Full car driving licence holders, England, 2016
                                                          • Costs of motoring spirals upwards during 2016…
                                                            • Figure 26: Consumer expenditure on car purchasing, servicing and repair and motoring expenses, seasonally adjusted at current prices, 2012-16
                                                          • … with revised VED rates for new cars adding further pressure on buyers of new cars
                                                            • Figure 27: VED rates, April 2017
                                                          • Distance travelled and number of trips showing signs of growth
                                                            • Figure 28: Trips, distance travelled and time taken, England, 2006-16
                                                          • Cars still dominate when compared to other transport options
                                                            • Figure 29: Mode share (average distance travelled), England, 2015
                                                          • Cars favoured for business, commuting and shopping …
                                                            • Figure 30: Percentage of trips made by transport type (England), 2016
                                                          • … with a near universal spread of their use by age
                                                            • Figure 31: Mode share (average distance travelled), England, 2016
                                                          • More consumers plan to buy than not buy a car in the next 3 years
                                                            • Figure 32: Do you or someone else in your household plan to buy a car(s) within the next 3 years, December 2017
                                                          • Buying new is the preferred choice for many potential purchasers
                                                            • Figure 33: Intention of purchasing a car/s in the next three years, by new or second-hand purchase, December 2017
                                                          • Hybrid and electric cars set to play a greater part in the market
                                                            • Figure 34: Hybrid and electric new car registrations (Great Britain), by volume*, 2011-21
                                                          • Number of larger households continues to increase
                                                            • Figure 35: Percent of households, United Kingdom, 2007 and 2017
                                                          • The UK’s population is expected to age
                                                            • Figure 36: Trends in the age structure of the UK population, 2011-21
                                                        • Companies and Brands – What You Need to Know

                                                          • A market in flux
                                                            • All things electric
                                                              • Promotional support remains high
                                                                • A number of brands are positioned well within the market
                                                                • Market Share

                                                                  • Big players suffer fall in share with Vauxhall performing the worst
                                                                    • Mercedes-Benz typical of the premium marques performing well
                                                                      • Innovative manufacturers are also making good progress
                                                                        • Figure 37: Manufacturer shares of new car registrations, 2011, 2013, 2015 and 2017
                                                                      • Executive models challenge traditional top 10 hierarchy
                                                                        • Figure 38: Top 10 new car models, 2017
                                                                      • Established models continue to dominate the used car market
                                                                        • Figure 39: Top 10 used car models, 2017
                                                                    • Launch Activity and Innovation

                                                                      • Dyson set to launch electric car in 2020
                                                                        • Nissan brain to vehicle technology
                                                                          • Figure 40: Nissan Brain to Vehicle Technology
                                                                        • Volvo becomes the first major car manufacturer to go electric
                                                                          • Figure 41: Volvo mild hybrid 48 volt technology
                                                                        • Chinese start-up offers cross between car and smartphone
                                                                          • Figure 42: Byton interior view
                                                                      • Advertising and Marketing Activity

                                                                        • Promotional expenditure remains high
                                                                          • Figure 43: Recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2013-17
                                                                        • Support for the 4x4 categories results in it becoming the largest market
                                                                          • Figure 44: Recorded above-the-line, online display and direct mail total advertising expenditure, by type of car, 2013-17
                                                                        • Company ambitions often influence promotional investment
                                                                          • Figure 45: Recorded above-the-line, online display and direct mail total advertising expenditure by leading car manufacturers, 2013-17
                                                                        • Digital grows its share to challenge television
                                                                          • Figure 46: Percentage media type split of recorded above-the-line, online display and direct mail total advertising expenditure by car manufacturers, 2013-17
                                                                        • Nielsen Ad Intel coverage
                                                                        • Brand Research

                                                                            • Premium brands and Ford score well
                                                                                • Figure 47: Attitudes towards and usage of selected brands, January 2018
                                                                              • Key brand metrics
                                                                                  • Figure 48: Key metrics for selected brands, January 2018
                                                                                • Brand attitudes: Asian brands offer good value while premium marques offer quality
                                                                                  • Figure 49: Attitudes, by brand, January 2018
                                                                                • Brand personality: Many major brands are viewed as having particular personalities
                                                                                  • Figure 50: Brand personality – macro image, January 2018
                                                                                • Many mass-market brands are viewed as user friendly
                                                                                  • Figure 51: Brand personality – micro image, January 2018
                                                                              • The Consumer – What You Need to Know

                                                                                • Car ownership stands at 70%
                                                                                  • Used cars are more prevalent than new cars
                                                                                    • Most non-car owners don’t drive
                                                                                      • Small and medium-sized vehicles are most popular with car owners
                                                                                        • Shopping is a key reason for using a car
                                                                                          • Digital dominates as a source of information
                                                                                            • Car hire and car sharing are popular alternatives to ownership
                                                                                            • Car Ownership

                                                                                              • Car ownership stands at 70%
                                                                                                • Figure 52: Car ownership, December 2017
                                                                                              • Large families and income are key in influencing car ownership
                                                                                                • Car ownership appears to have stagnated since 2016
                                                                                                  • Figure 53: Car ownership, 2014-2017
                                                                                              • Age of Car Owned

                                                                                                • Used cars are more popular than new cars
                                                                                                  • Figure 54: Age of car owned, December 2017
                                                                                                • Affluence has a strong impact on ownership of new cars
                                                                                                  • Age impacts on choice
                                                                                                    • Men are important owners of new cars
                                                                                                      • Londoners prefer to buy new
                                                                                                        • As with ownership, new car purchases within the last two years has also stalled
                                                                                                          • Figure 55: Age of Car Owned, 2014-2017
                                                                                                      • Non-Car Ownership

                                                                                                        • Most non-car owners don’t drive
                                                                                                          • Figure 56: Non-car ownership, December 2017
                                                                                                        • Age, gender and affluence are all associated with not owning a car
                                                                                                        • Type of Car Owned

                                                                                                          • Small and medium-sized vehicles are most popular with car owners
                                                                                                            • Figure 57: Type of Car Owned, December 2017
                                                                                                          • Young adults have particular preferences
                                                                                                            • Men look for a larger vehicle
                                                                                                              • Affluent want more specialist vehicles
                                                                                                                • Compact cars and SUVs are especially popular with new car buyers…
                                                                                                                  • …boosting their share of ownership
                                                                                                                    • Figure 58: Type of car owned, 2014, 2016 and 2017
                                                                                                                • Reasons for Using a Car

                                                                                                                  • Shopping is a key reason for using a car
                                                                                                                    • Figure 59: Reasons for using a car, December 2017
                                                                                                                  • Young and old have different demands from a car
                                                                                                                    • Commuting is a feature for the most affluent car owners
                                                                                                                      • Cars purchased in the last two years are more likely to be used for commuting
                                                                                                                      • Sources of Information

                                                                                                                        • Digital dominates as a source of information
                                                                                                                          • Figure 60: Sources of information, December 2017
                                                                                                                        • Young men show most interest in information on cars
                                                                                                                          • Demands from urban areas necessitate a broad communication strategy
                                                                                                                            • Publications are popular with the A socio economic group
                                                                                                                              • Repertoire analysis notes interest of young men and affluent adults in multiple channels
                                                                                                                                • Car owners show a strong preference for particular channels …
                                                                                                                                  • … with this especially true of new car owners
                                                                                                                                  • Alternatives to Car Ownership

                                                                                                                                    • Car hire and car sharing are the popular alternatives
                                                                                                                                      • Figure 61: Alternatives to car ownership, December 2017
                                                                                                                                    • Young adults are a key target
                                                                                                                                      • Affluence plays a major factor
                                                                                                                                        • Interest in alternatives is highest in urban areas
                                                                                                                                          • Older adults are likely to consider a variety of alternatives
                                                                                                                                            • Alternatives are of less interest to non-car owners
                                                                                                                                              • Owners of recently purchased cars are an important target
                                                                                                                                                • Interest in alternatives to car ownership is growing
                                                                                                                                                  • Car sharing economy
                                                                                                                                                    • Figure 62: Alternatives to car ownership, 2015 and 2017
                                                                                                                                                • 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 methodology
                                                                                                                                                              • Forecast Tables
                                                                                                                                                                • Figure 63: New and used car market sales, by volume, 2012-22
                                                                                                                                                                • Figure 64: Forecast of new and used car sales, by volume – best- and worst-case scenarios, 2017-22