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SUMMARY
CAR PURCHASING PROCESS
UK, APRIL 2017
CAR PURCHASING PROCESS, UK - APRIL 2017 2
CAR SALES REACHED AN ALL-TIME HIGH OF 10.54 MILLION UNITS IN 2016. WHILE THIS IS GOOD NEWS FOR THOSE
INVOLVED IN THIS SECTOR, AND A REFLECTION OF THE EFFORTS TO STIMULATE NEW CAR SALES IN RECENT
YEARS, THERE ARE MANY REASONS TO BE CONCERNED ABOUT THE NEXT FEW YEARS. NUMEROUS FACTORS
APPEAR SET TO IMPACT ON DEMAND RESULTING IN EVERMORE CREATIVE APPROACHES BEING REQUIRED IN
ORDER TO CONTINUE TO ENCOURAGE PURCHASING.
The market FIGURE 1: UK NEW AND USED CAR SALES, BY VOLUME, 2011-21
Companies and brands A long-term trend with regards to last two years. Currently a fifth of owners
expenditure is a shift away from traditional bought new in the last two years while
Mixed fortunes for car channels such as direct mail and press 23% bought second-hand during this
manufacturers advertising to newer media such as period. Overall, most cars in ownership
television and digital. Digital has made the (57%) were purchased more than two
Many of the leading car manufacturers greatest strides between 2012 and 2016 years ago.
have suffered from mixed fortunes in to move from fifth place to third place.
recent years. Long-time leaders Ford and Television, traditionally an expensive When comparing current data to that for
Vauxhall have seen their share of the channel, has similarly made progress to the period 2015 to 2017, a 2 percentage-
market decline although in the wake of account for a third of expenditure in 2016 point increase is evident for those who
dieselgate, third-placed manufacturer, and is illustrative of the current confidence have purchased a new car less within the
Volkswagen, has also suffered a fall in its of advertisers in the car market. last two years. In contrast, a 2 percentage-
share of sales. It held a reduced 7.7% of point decrease is recorded for those who
the new car market in 2016, while Ford The consumer have purchased a second-hand car more
took 11.8% and Vauxhall 9.3%. than two years ago is recorded.
Car owners are in the majority
In contrast, premium brands continue to More than half of adults plan to
grow their share of sales, with BMW, Audi Car ownership is high, with Mintels buy a car in the next three years
and Mercedes-Benz recording especially research placing ownership at 71% of
strong growth. They took fourth, fifth and the adult population. Comparing current Over half (53%) of adults say that they,
sixth placings and a combined 19.7% of car ownership with the period 2015 or someone else in their household, will
sales in 2016, with this up on 14.0% on to 2017, there has been an increase definitely or probably buy a car in the
2010. of 7 percentage points. Such a rise in next three years with 26% saying they
ownership mirrors the increase in the sale will definitely purchase a vehicle. When
Manufacturers and distributors of cars over this same period and suggests comparing Mintels latest research with
invest in online as a sales channel a direct link between growing car sales that conducted since 2015, while there has
and the spread in car ownership. been an overall increase of 5 percentage
Innovations continue to take place within points in those who are definitely
the automotive market with much recent Nearly half of all cars were purchasing, there has been no change
attention focused towards the use of the purchased in the last two years between 2016 and 2017. This hints at a
internet as a sales channel. Although to date recent weakening in the market and is
the internet has failed to develop as a mass Mintels research records that a sizeable likely to signal a slowdown for future car
market channel for car purchasing, there is percentage (47%) were acquired in the sales.
evidence that manufacturers and others with
an interest in the market believe its role in
purchasing may be about to change. FIGURE 5: INTENTION TO PURCHASE A CAR IN THE NEXT 3 YEARS,
FEBRUARY 2017
Car manufacturers such as Hyundai,
Peugeot, Citron and Smart have all Do you or someone else in your household plan to buy a car(s) within the next
opened dedicated websites since early 3 years?
2017 whereby consumers can choose
and buy cars. Equally those with an
interest in helping buyers are also showing
renewed interest in buying online, such
as Exchange & Mart which has made
improvements to its website.
Less than half of those planning FIGURE 6: STRONGEST INTENTIONS TO PURCHASE A CAR IN THE NEXT 3
to purchase expect to do so in the YEARS, FEBRUARY 2017
coming 12 months
Approximately when do you think you will be looking to make this purchase? If
Providing further evidence that car you/your household plan on buying more than one car please answer for the car
purchasing may be beginning to slow you plan to purchase first.
down is the fact that less than half (46%)
who expect (definitely or probably) to buy
in the coming three years plan to buy in
the coming 12 months. Instead, 48% say
they plan to purchase over the coming two
or three years.
Do you plan to buy the car new or second hand/used? If you/your household
plans on buying more than one car please answer for the car you plan to
purchase first.
Base: 1,062 internet users aged 17+, or household members, who definitely or probably plan to buy a car in the
next 3 years
Source: Lightspeed/Mintel
Savings and part exchange are the FIGURE 8: METHODS OF PAYMENT FOR NEXT CAR, FEBRUARY 2017
most popular methods of paying
for a car Thinking only about your next car purchase, which method(s) would you use to
pay for it?
Although there are various methods
for consumers to pay for their next car,
savings or using the capital with an
existing vehicle through a part exchange
are by far the most important. Nearly six
out of 10 (59%) of those planning to buy
a car in the coming three years would use
savings, while 37% would part exchange
an old car. When it comes to obtaining
finance, the most popular options are HP
(13%) and PCP agreements (10%).
Base: 1,062 internet users aged 17+, or household members, who definitely or probably plan to buy a car in the
next 3 years
Source: Lightspeed/Mintel
Independent and dealer websites FIGURE 10: PREFERRED INTERNET, FEBRUARY 2017
dominate for online purchasing
And which of the following internet channels would you most prefer to use
Over a third (36%) of those who are very when purchasing your next vehicle?
likely or likely to buy online in the coming
three years would go to an independent
website while a further 33% would use a
manufacturer website. Auction websites
record a further 23% of interest, with this
likely to reflect their current prominence
as a notable channel for online car
purchasing.
Diesel emission testing scandal Imagine that you were buying a new car for everyday use. Which of the
records high awareness following fuel types would you be interested in having?
Base: 1,062 internet users aged 17+, or household members, who definitely or probably plan to buy a car in the
next 3 years
Source: Lightspeed/Mintel
What we think likely that other factors will also come comes to preferred vehicle formats and
into play. In particular, there is the fact manufacturers, with both of these set to
The UK car market has experienced that the car sector, and especially new continue. Developments in areas such
tremendous growth in recent years with car sales, operates on cycles, with sales as fuel are already expected to see a
combined new and used sales reaching subject to natural fluctuations. Other diminution in the profile for diesel while
a new high in 2016. Car buyers have likely impacts include rising costs of the role of the technology, both within
been encouraged to purchase through motoring, especially those associated and outside of cars, continues to evolve.
a combination of initiatives which have with insurance, as well as the likely
benefited the new car sector in particular. restrictions on certain vehicles, such as The role of the internet in particular is set
Yet set against this positive background, diesels, being permitted to operate in to strengthen as consumers increasingly
Mintel believes that the short- to medium- urban areas in the long term. become accustomed to purchasing
term outlook for the market is one of an ever-wider range of products and
uncertainty with sales set to stagnate and Despite what is expected to be a difficult services online. Although any mass
overall fall back. period for volume sales, the car market movement of buyers online is still some
is likely to continue to remain a dynamic way off, the internet is expected to
Although much of the expected slowdown sector when it comes to demands impact more on purchasing and change
for the market is likely to be explained from purchasers. These have already the role of dealers and other traditional
by the uncertainty around Brexit, it is seen changes to the market when it sales channels.
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