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ISBN 1-85765-837-X

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Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Market Overview

DEFINITION

INTRODUCTION

MARKET SECTORS

WORLD PRODUCTION

MARKET STRUCTURE

INDUSTRY STRUCTURE

INTERNATIONAL TRADE

EMPLOYMENT

TRADE ASSOCIATIONS

MARKET SEGMENTATION

TOTAL MARKET SIZE

KEY TRENDS AND PROSPECTS

PEST ANALYSIS

EUROPEAN AND GLOBAL PERSPECTIVE

Table 1.1: Leading World Producers of Cars and Commercial Vehicles (number of vehicles), 1996

Table 1.2: UK Gross Domestic Product at Constant 1990 Prices (£m), 1992-1997

Table 1.3: Vehicles in Use in the UK (number of vehicles), 1991-1996

Table 1.4: Number of Vehicles Licensed in Great Britain (000), 1992-1996

Table 1.5: New Motor Vehicle Registrations Each Year in Great Britain (number of units), 1993-1997

Table 1.6: Value of UK Production (£m), 1993-1997

Table 1.7: UK Car and Commercial Vehicle Production (number of vehicles), 1990-1997

Table 1.8: Annual New Motorcycle and Moped Registrations (number of vehicles), 1992-1997

Table 1.9: Sales Position by Engine Capacity (1997)

Table 1.10: UK International Trade in Cars and Commercial Vehicles by Value and Volume (£m and 000 vehicles), 1992-1996

Table 1.11: Apparent UK Market in Motorcycles and Scooters (£m at msp), 1993- 1997

Table 1.12: UK International Trade in Motor Components (£m), 1992-1996

Table 1.13: Employment in Transport Equipment, Motor Vehicles and Parts (000 employees), 1993-1997

Table 1.14: Principal Trade Bodies Associated with the UK Motor Industry, 1998

Table 1.15: Number of New Car Registrations by Origin (000), 1993-1997

Table 1.16: Company Cars as a percentage of New Registrations ( percent), 1993-1997

Table 1.17: Leading Suppliers of Cars to the UK Market (number of registrations and percent), 1996 and 1997

Table 1.18: Top Ten UK Registrations by Model Range (number of registrations and percent), 1996

Table 1.19: Top Selling Diesel Cars in the UK (number and percent), 1996

Table 1.20: Top Selling Automatic Cars in the UK (number and percent), 1996

Table 1.21: Cars Modified for Disabled Drivers, 1993-1997

Table 1.22: Leading Suppliers of Commercial Vehicles to the UK Market (number of registrations and percent), 1996

Table 1.23: UK Motorcycle Production (000), 1990-1997

Key Note Field and Trade Research

CONSUMER RESEARCH

Table 2.1: Breakdown of Age of Only Car or Most Recently Obtained Car by Year of Registration (000 adults and percent), 1997

Table 2.2: Self-Drive Car Hire for Personal and Business Use by Social Category (000 adults), 1997

Table 2.3: Ownership and New Purchases of Motorcycles and Scooters by Engine Capacity (000 adults), 1997

Table 2.4: Which, If Any, of the Following Factors Influence Your Decision When Buying a Car ( percent of respondents), 1998

Table 2.5: Which, If Any, of the Following Factors Would Encourage You to Use Public Transport More Frequently ( percent of respondents), 1998

Competitor Analysis

LEADING SUPPLIERS

LEADING FRANCHISED DEALERS

LEADING MOTOR COMPONENT MANUFACTURERS AND DISTRIBUTORS

Table 3.1: Leading Suppliers of Cars by Sales (£m), 1996/1997

Table 3.2: Number of Franchised Car Dealers by Manufacturer, 1997

Table 3.3: Leading Car and Commercial Vehicle Distributors by Turnover (£m), 1996/1997

Table 3.4: Leading Manufacturers and Distributors of Autoparts by Turnover (£m), 1996, 1997 and 1998

Table 3.5: Major Motor Component Manufacturers, 1998

Cars

DEFINITION

KEY TRENDS

MARKET SIZE

MARKET STRUCTURE

MAJOR PLAYERS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS 1998 TO 2002

Table 4.1: Apparent UK Market for Cars (£m at msp), 1993-1997

Table 4.2: Main Media Advertising Expenditure of Motor Cars by Manufacturers (£000), 1996 and 1997

Table 4.3: Main Media Advertising Expenditure by Leading Main Dealers (£000), 1996 and 1997

Table 4.4: Car Ownership by Social Grade in the UK (number of cars owned by 000 households), 1997

Table 4.5: Car Ownership by Social Grade in the UK ( percent of cars owned by households), 1997

Table 4.6: Forecasts of the Apparent UK Demand for Cars by Value at Constant 1998 Prices (£m), 1998-2002

Commercial Vehicles

DEFINITION

KEY TRENDS

MARKET SIZE

MARKET STRUCTURE

MAJOR PLAYERS

ADVERTISING AND PROMOTION

BUYING BEHAVIOUR

FORECASTS 1998 TO 2002

Table 5.1: Apparent UK Market for Commercial Vehicles (£m at msp), 1993-1997

Table 5.2: Main Media Advertising Expenditure of Light Commercial Vehicles by Manufacturers (£000), 1996 and 1997

Table 5.3: Forecasts of the Apparent UK Market for Commercial Vehicles by Value at Constant 1998 Prices (£m), 1998-2002

Motorcycles and Scooters

DEFINITION

KEY TRENDS

MARKET SIZE

MARKET STRUCTURE

MAJOR PLAYERS

BUYING BEHAVIOUR

FORECASTS 1998 TO 2002

Table 6.1: Apparent UK Market for Motorcycles and Scooters (£m at msp), 1993-1997

Table 6.2: Main Media Advertising Expenditure of Motorcyles by Manufacturers (£000), 1996 and 1997

Table 6.2: Forecast of the Apparent UK Market for Motorcycles and Scooters by Value at Constant 1998 Prices (£m), 1998-2002

Motor Components

DEFINITION

KEY TRENDS

MARKET SIZE

MARKET STRUCTURE

MAJOR PLAYERS

BUYING BEHAVIOUR

FORECASTS 1998 TO 2002

Table 7.1: Apparent UK Market for Vehicle Bodies and Parts (£m at msp), 1993-1997

Table 7.2: Forecast of the Apparent UK Market for Vehicle Bodies and Parts by Value at Constant 1998 Prices (£m), 1998-2002

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

The Future

THE FUTURE

Table 9.1: Apparent Market for the UK Motor Industry at Constant 1998 Prices (£m), 1998-2002

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

This survey of the UK motor industry assesses the current market and future prospects for new cars, commercial vehicles (including buses and coaches), vehicle components destined for original equipment and for replacement, and powered two-wheelers (motorcycles and scooters).

In 1997, the apparent UK market for vehicles and components was worth an estimated £41.41bn, of which cars accounted for £23.53bn and commercial vehicles accounted for £6.02bn (a combined market share of 71.4 percent), while motor components accounted for £11.58bn (28 percent) and motorcycles and scooters amounted to £277.1m (0.6 percent). The value of repairs and servicing, petrol, oil and miscellaneous other motor products are not included in these figures.

Domestic demands for cars, commercial vehicles, vehicle components and motorcycles and scooters have all increased in volume as well as value terms, compared with the previous year, as the UK economy has continued to grow in real terms. This buoyancy has been sustained by rising consumer expenditure on high-value durable goods and improvements in employment prospects, which, reinforced by building society windfalls, have helped to encourage spending.

Following the recent acquisition of Rolls-Royce by Volkswagen, the British car industry, apart from a few small specialist producers, is totally foreign owned. The commercial vehicle industry is in a similar position since Leyland and DAF became part of the US-owned Paccar group in 1996. However, Dennis Group, a producer of specialist vehicles, buses and coaches; and LDV, a producer of vans, remain as independent companies.

Vehicle component manufacture is so far under less foreign control than vehicle manufacture, but appears to be heading in the same direction. T&N, one of the biggest UK companies in the industry, was absorbed as a subsidiary of the US-owned Federal Mogul motor components group in 1997. There is no foreign ownership within the motorcycle industry, but Triumph Motorcycles, as an independent British-owned company, is the sole volume producer of motorcycles in the UK. However, it has less than 5 percent share of the domestic two-wheeler market.

Foreign ownership has strengthened vehicle and component manufacture in the UK, although paradoxically, imports of both continue to grow. The US, Japanese, German and French owners of UK subsidiaries have all announced expansion plans for their manufacturing plants in the UK, and apparently are not deterred by the current strength of the pound against making their long-term investments. In addition, Daewoo, the South Korean motor manufacturer, is the joint venture partner with LDV to produce a new range of vans at a new plant to be built in Birmingham.

Distribution of new vehicles in the UK remains in the hands of franchised dealers, but the structure of the industry is changing. The trend towards multifranchising is growing strongly and the bigger dealers are taking over their smaller and medium-sized competitors, adding their marques wherever feasible. Their exclusive sales territories are being expanded by the manufacturers, but in return, they are expected to generate large volumes of extra business.

Some volume manufacturers have become circumspect about supplying the fleet markets at heavily-discounted prices at the expense of their profits, and are reviewing their policies. Ford, Vauxhall and Rover Group are less concerned about their drop in market share, and are cultivating the private car buyer which is a more profitable strategy. It coincides with the trend to give more choice to employees over the marque of their company car, and the heavier taxation on users of company cars which has the intention of driving many more people into private ownership.

According to the Government's strategy for public transport, it will be given priority over private transport, so demand for buses and coaches is expected to rise steeply. Henlys, once one of the UK's leading car distributors, is now totally committed to the bus market and has withdrawn from selling cars. Arriva (formerly Cowie Group), a leading national car and commercial vehicle distributor, is also heavily committed to public passenger road transport. Other distributors may also enter this market if the prospects continue to be attractive. Volvo and Dennis are the leading providers of chassis and subassemblies to bus and coach body builders in Britain, and will obviously benefit from an expansion in demand.

It is anticipated by Key Note that total apparent UK demand between 1998 and 2002 will increase in value terms from an estimated £42.41bn in 1998 to £49.17bn at constant 1998 prices -- a total increase of 15.9 percent. Basically, economic growth is slowing as the Government has long-term plans to only permit `sustainable' growth in gross domestic product (GDP) of around 2 percent per annum. Continuing overcapacity in Europe and greater price transparency throughout the European Union (EU), possibly the ability for the prospective buyer in any EU country to buy without hindrance from anywhere in the community, and the continuing threat of cheaper imports from abroad, particularly the Far East, will all have an influence on the market. A major uncertainty which could transform prospects for new vehicle sales is whether the Government will make any major effort to persuade the owners of between 10 million and 12 million cars over 10 years-old, to replace these with more fuel-efficient cars.

Text © 1998 Key Note

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