Abstract
This report addresses the car retail market in the UK, discussing current trends and issues in the market and future prospects, last examined by Mintel in its report Car Retailing - UK, Retail Intelligence, August 2006.
Mid-2008 marks a worrying time for car retailers. The headlines are dominated by economic gloom, and new car sales appear to have gone into reverse, with little prospect of recovery during the second half of the year.
Meanwhile, motorists have to pay more than ever before simply to keep their cars on the road, including higher fuel costs, as the price of oil soars, car tax and, in some areas, congestion charging.
Consolidation has continued within the industry, with larger dealer groups achieving ever-greater scale: with some businesses likely to struggle during the current economic downturn, there are likely to be further opportunities to make acquisitions for those with the resources to afford them.
Table of Contents
- Issues in the Market
- Main issues
- Definition
- Abbreviations
- Market in Brief
- Key points
- Tough times loom ahead
- Motoring costs mount up...
- ...as feel-good factor evaporates
- Dealership numbers continue to fall
- Problems for some...
- ...but opportunities for others?
- Two in three have a car they use
- Purchasing intentions holding up... For now
- Dealerships still win on trust
- Role of the internet
- Alternative fuel attracts -- but for differing reasons
- Fun for some, stressful for others
- Internal Market Environment
- Key points
- Spending on cars
- Figure 1: Consumer expenditure on car purchasing, at current and constant 2001 prices, 2003-08
- Motoring costs escalate
- Figure 2: Consumer expenditure on car purchasing, servicing & repair and motoring expenses, at current prices, 2003-08
- Fuel costs escalate
- Figure 3: Average annual retail motor fuel prices*, 1998-2007
- Changes to Vehicle Excise Duty
- Figure 4: Vehicle Excise Duty rates, 2007/08-2010/11
- Charging for road use
- Other schemes face rejection
- Government presses ahead
- Block exemption' s days numbered?
- Original aims and criticisms
- The future
- Colour-coding emissions
- Opportunities online...
- ...but pitfalls for the unwary
- Caveat surfer
- Broader Market Environment
- Key points
- PDI and consumer spending continue to rise
- Figure 5: Trends in personal disposable income and consumer expenditure, 2003-13
- Retail sales growth slows
- Figure 6: UK: ONS and BRC: Total retail sales year-on-year growth, July 2007-June 2008
- Credit crunch bites
- Figure 7: Trends in private new car registrations and finance penetration, 2001-07
- Population growth in key groups
- Figure 8: Trends in the age structure of the UK population, by gender, 2003-13
- More over 65' s? No problem.
- Growth in key car buying ages
- Growth among ABs, C1s...
- Figure 9: Forecast adult population trends, by socio-economic group, 2003-13
- ...but number of families to stand still
- Figure 10: Forecast adult population trends, by lifestage, 2003-2013
- Smaller households on the rise
- Figure 11: UK household sizes, 2003-13
- Women, over-50s get mobile
- Figure 12: Full driving licence holders, by age and gender, 1995/97-2006
- Rise in car ownership
- Figure 13: Number of cars owned by individual households, 1985/86-2006
- More cars per person
- Figure 14: Number of cars per household and cars per adult aged 17+, 1985/86-2006
- Broadband penetration grows
- Figure 15: UK Broadband penetration, 2004-08
- Market in Context
- Key points
- Other spending priorities
- Figure 16: Expenditure priorities, 2007 and 2008
- Strengths and Weaknesses in the Market
- Strengths
- Weaknesses
- Market Size and Forecast
- Key points
- New registrations set to fall in 2008...
- Figure 17: Total new car registrations, by private, fleet and business sales, 2002-08
- ...while used volumes continue downward trend
- Figure 18: Sales of used cars, by volume, 2003-08
- Value sales
- Figure 19: Value sales of new and used cars, at current prices, 2003-13
- igure 20: Value sales of new and used cars, at constant 2008 prices*, 2003-13
- Slow motion
- Used cars move forward
- Factors used in the forecast
- Makes and Models and Dealership Numbers
- Key points
- Dealer distribution network
- Figure 21: Number of UK franchised dealer outlets, 1998-2007
- Top ten also decline
- Figure 22: Ten largest UK franchised dealer networks, by marque and number of outlets, 2003-07
- MPVs take pole position
- Figure 23: New car registrations, by product category, 2003-07
- Ford and Vauxhall the dominant brands
- Figure 24: Manufacturer shares of new car registrations, 2003-07
- Retail Market Shares
- Key points
- The big get bigger
- Figure 25: Top ten UK car dealers, by turnover, number of outlets and market share, 2005 and 2007
- Consolidation continues...
- ...but what is driving it?
- Corporate activity
- Retailer Profiles
- Pendragon plc
- Figure 26: Pendragon UK, sales and operating performance, 2003-07
- Inchcape
- Figure 27: Inchcape UK*, financial performance, 2003-07
- Sytner Group
- Figure 28: Sytner Group Limited, financial performance, 2003-06
- Arnold Clark
- Figure 29: Arnold Clark Ltd, financial performance, 2002-06
- Lookers
- Figure 30: Lookers Plc, financial performance, 2003-07
- Jardine Motors Group
- Figure 31: Jardine Motors Group UK Ltd, financial performance, 2003-06
- Camden Group Services
- Greenhouse Group
- Figure 32: Greenhous Group, financial performance, 2006 and 2007
- Vertu Motors
- Factory-owned dealer groups
- Mercedes-Benz Retail
- Ford Retail Group
- Reagroup
- Robins & Day
- Car supermarket operators
- Carcraft
- Car Giant
- Motorpoint
- Online/phone retailers
- Autotrader.co.uk
- eBaymotors.co.uk
- Jamjar.com
- Oneswoop.com
- Who Uses Cars?
- Key points
- Two in three have use of car
- Figure 33: Presence of car in household that respondent currently drives, June 2008
- Impact of gender and age
- Figure 34: Consumers stating whether they currently drive a car in their household, by gender and age, June 2008
- Got kids? Get a car
- Figure 35: Consumers stating whether they currently drive a car in their household, by age of own children in household, June 2008
- Couples outweigh singles
- Figure 36: Consumers stating whether they currently drive a car in their household, by lifestage, June 2008
- Wealth equals wheels
- Figure 37: Consumers stating whether they currently drive a car in their household, by socio-economic group, June 2008
- The Credit Crunch and Buying Intentions
- Key points
- Most potential buyers unfazed -- for now
- Figure 38: Impact of credit crunch on car buying plans over next two years, June 2008
- Non-buyers are women, over-55s
- Figure 39: Consumers stating that they aren' t planning to buy a car in the next two years, by gender and age, June 2008
- Parents of teens not keen on buying
- Figure 40: Consumers stating that they aren' t planning to buy a car in the next two years, by age of own children in household, June 2008
- Young aspire to their own cars
- ABs key for new car sales
- Figure 41: Impact of the credit crunch on car buying plans over the next two years, by socio-economic group, June 2008
- How People Go About Buying Cars
- Key points
- Figure 42: How consumers would consider going about buying a car, June 2008
- Traditional dealers the preferred option
- Internet remains small, but isn' t insignificant
- Figure 43: How consumers would consider going about buying a car, dealer/web comparisons, June 2008
- Online research, not sales driven right now
- Trusted dealer more important to men, older respondents and ABs
- Figure 44: Consumers that would go about buying a car by dealing with a dealership they know, by gender, age and socio-economic group, june 2008
- Young, free, and flicking through the papers
- Figure 45: Consumers that would use the press (eg Autotrader) when looking to buy a car, by detailed demographics, June 2008
- Younger consumers enthuse online -- but would they buy?
- Figure 46: Consumers that would use the web to compare or buy a car directly, by age, June 2008
- Figure 47: Types of activity undertaken on the internet in the last three months, by age, April 2008
- Buying online, direct from a manufacturer
- Factors Influencing Choice of Dealer
- Key points
- Figure 48: Factors influencing choice of dealer, June 2008
- The price is right -- for a deal
- Internet influences few
- Selling the service
- Age equals experience
- Figure 49: Consumers stating the importance of previous dealer experience, when deciding which dealership to buy from, by age, June 2008
- ABs, C2s talk the talk
- Figure 50: Consumers that feel it important that a dealership is happy to negotiate on price, by socio-economic group, June 2008
- Are you being serviced?
- Figure 51: Consumers that feel good after-sales service and knowledgeable staff are important factors in determining dealership choice, by gender, age and socio-economic group, june 2008
- Factors Influencing Car Purchase
- Key points
- Figure 54: Environmental factors influencing car purchase, June 2008
- Green issues to the fore -- but what' s the motivation?
- Cost of fuel a deterrent
- Mixed views of hybrids
- The affluent look to save money
- Figure 55: Consumers that agree with the statement ' I' d buy an environmentally friendly car if it helps me avoid extra taxes/congestion charges' , by gender, age, socio-economic group, gross annual household income and region, June 2008
- Families, third agers look to emissions
- Figure 56: Consumers that agree with the statement ' I would always consider environment factors (eg low CO2 emissions) when buying a new or used car' by gender, age, socio-economic group, marital status, lifestage and age of own children in household, June 2008
- Appendix: Who Uses Cars?
- Figure 66: Presence of car in household that respondent currently drives, by detailed demographics, June 2008
- Appendix: The Credit Crunch and Buying Intentions
- Figure 67: Impact of credit crunch on car buying plans over next two years, by detailed demographics, June 2008
- Appendix: How People Go About Buying Cars
- Figure 68: How consumers would consider going about buying a car, by detailed demographics, June 2008
- Figure 69: How consumers would consider going about buying a car, by detailed demographics (continued), June 2008
- Appendix: Factors Influencing Choice of Dealer
- Figure 70: Factors influencing choice of dealer, by detailed demographics, June 2008
- Figure 71: Factors influencing choice of dealer, by detailed demographics (continued), June 2008
- Figure 72: Factors influencing choice of dealer, by detailed demographics (continued), June 2008
- Appendix: Factors Influencing Car Purchase
- Figure 76: Environmental factors influencing car purchase, by detailed demographics, June 2008
- Figure 77: Environmental factors influencing car purchase, by detailed demographics (continued), June 2008
