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| MP60011 |
| MAPS VEHICLE BREAKDOWN SERVICES JUNE 2003 |
| Overview |
Editor: Simon Taylor
ISBN:
1-86111-359-5
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This report covers: Vehicle breakdown services, vehicle parc, car registrations, car ownership, car accidents, RTA, road traffic accidents, motoring organisations, driver profile, breakdowns, public transport, advertising, fast call-out, on-site repairs, hire cars, women drivers, home call-out, overseas cover, trade journals
Companies covered include: The Automobile Association, AA, RAC, Direct Line Group, Green Flag, Europ Assistance, Britannia Rescue Services, Mondial Assistance (UK),
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Table of Contents Executive Summary
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Engine| Executive Summary 5 |
| 1. Introduction 7 |
| 2. Strategic Overview 9 |
| MARKET DYNAMICS AND SEGMENTATION 9 |
| Car Parc 9 |
| Table 1: Total UK Car Parc by Volume (million cars and percent), 1998-2002 10 |
| New Car Registrations in Great Britain 10 |
| Table 2: Number of New Car Registrations in Great Britain (000, percent and index 1998=100), 1998-2002 11 |
| Age Profile of the Car Parc 11 |
| Table 3: Age Profile of UK Vehicle Stock by Number of Units (million and percent), 2001 12 |
| Road Traffic 12 |
| Table 4: Road Traffic in Great Britain by Total Distance Travelled — Cars and Taxis (billion vehicle kilometres, percent and index 1998=100), 1998-2002 13 |
| Car Ownership and Demographics 13 |
| Table 5: Car Ownership per Household in Great Britain by Number of Cars Owned ( percent and billion households), 1997-2001 14 |
| Car Accidents 14 |
| Table 6: Road Traffic Accidents in Great Britain (number, percent and index 1997=100), 1997-2001 15 |
| COMPETITIVE STRUCTURE 15 |
| Table 7: Membership and Market Share of Main Motoring Organisations (million and percent), 2000 and 2002 15 |
| Figure 1: Market Share of Main Motoring Organisations by Membership ( percent), 2002 16 |
| ADVERTISING 16 |
| Table 8: Main Media Advertising Expenditure on Vehicle Recovery Services (£m and percent), Years to December 2001 and 2002 17 |
| THE CONSUMER 17 |
| Table 9: Penetration of Non-Drivers, and Drivers Who Are Not Members of Any Vehicle Breakdown Organisation ( percent of respondents), 2003 18 |
| MARKET FORECASTS 19 |
| 3. The Vehicle Breakdown Market 21 |
| BACKGROUND 21 |
| MARKET SIZE 21 |
| Table 10: The Total UK Market for Vehicle Recovery Services by Value (£m, percent and index 1998=100), 1998-2002 22 |
| Figure 2: The Total UK Market for Vehicle Recovery Services by Value (£m), 1998-2002 22 |
| Table 11: Membership of Vehicle Breakdown Services (million and index 1997=100), 1997 and 1999-2002 23 |
| Table 12: Ad-Hoc Services as a Share of the Total UK Vehicle Recovery Services Market by Value (£m and percent), 1998-2002 23 |
| CONSUMER TRENDS 24 |
| Table 13: Average Distance Travelled by Mode of Travel (mileage per person per year), 1985/1986-1999/2001 24 |
| Table 14: Top Ten Reasons for RAC Recovery Call-Outs by Type of Breakdown ( percent of total RAC call-outs), 2002 25 |
| MARKETING ACTIVITY 26 |
| ADVERTISING 26 |
| Table 15: Main Media Advertising Expenditure by Vehicle Recovery Service Providers (£000 and percent), Year to December 2002 27 |
| Figure 3: Main Media Advertising Expenditure by Vehicle Recovery Service Providers ( percent), Year to December 2002 27 |
| 4. An International Perspective 28 |
| MARKET DEVELOPMENTS 28 |
| COMPETITOR ENVIRONMENT 28 |
| Table 16: Total Markets for Vehicle Recovery Services in Selected Countries by Sales and Membership of Breakdown Organisations ($m and 000), 2001 29 |
| CONSUMER BEHAVIOUR 29 |
| 5. PEST Analysis 31 |
| POLITICAL FACTORS 31 |
| Economic Factors 32 |
| Social Factors 33 |
| Technological Factors 33 |
| 6. Consumer Dynamics 35 |
| OVERVIEW 35 |
| Table 17: Vehicle Recovery Organisation Membership ( percent of respondents), 2003 36 |
| PERCEIVED MAIN BENEFITS OF VEHICLE RECOVERY ORGANISATION MEMBERSHIP 38 |
| Table 18: Perceived Benefits of Membership of a Vehicle Recovery Service ( percent of respondents), 2003 38 |
| Relay/'Get You Home' 38 |
| Table 19: Relay/'Get You Home' as a Perceived Benefit of Vehicle Recovery Membership ( percent of respondents), 2003 39 |
| Service Within an Hour 40 |
| Table 20: Service Within an Hour as a Perceived Benefit of Vehicle Recovery Membership ( percent of respondents), 2003 40 |
| Fast Call-Out 41 |
| Table 21: Fast Call-Out as a Perceived Benefit of Vehicle Recovery Membership ( percent of respondents), 2003 42 |
| Hire Cars Available During Repairs 43 |
| Table 22: Hire Cars Available During Repairs as a Perceived Benefit of Vehicle Recovery Membership ( percent of respondents), 2003 43 |
| Women as a Priority 44 |
| Table 23: Women as a Priority as a Perceived Benefit of Vehicle Recovery Membership ( percent of respondents), 2003 45 |
| 7. Supplier Profiles 46 |
| THE AUTOMOBILE ASSOCIATION 46 |
| Corporate Strategy 46 |
| Advertising 46 |
| Profitability 46 |
| RAC PLC 47 |
| Corporate Strategy 47 |
| Advertising 47 |
| Profitability 47 |
| DIRECT LINE GROUP 48 |
| Corporate Strategy 48 |
| Advertising 48 |
| Profitability 49 |
| GREEN FLAG LTD 49 |
| Corporate Strategy 49 |
| Advertising 50 |
| Profitability 50 |
| EUROP ASSISTANCE LTD 50 |
| Corporate Strategy 50 |
| Advertising 50 |
| Profitability 50 |
| BRITANNIA RESCUE SERVICES LTD 51 |
| Corporate Strategy 51 |
| Advertising 51 |
| Profitability 51 |
| MONDIAL ASSISTANCE (UK) LTD 51 |
| Corporate Strategy 51 |
| Advertising 52 |
| Profitability 52 |
| 8. The Future 53 |
| Table 24: Forecast UK Market for Vehicle Recovery Services by Value (£m, percent and index 2003=100), 2003-2007 54 |
| Figure 4: Forecast UK Market for Vehicle Recovery Services by Value (£m), 2003-2007 54 |
| 9. Further Sources 55 |
| Associations 55 |
| General Sources 55 |
| Bonnier Information Sources 55 |
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| This report provides an overview and analysis of vehicle breakdown services in the UK for private motorists, including those with fully expensed company cars. |
| The vehicle breakdown services market has four main sectors, but they are not mutually exclusive. These are the ad-hoc sector, the private/retail sector, the third-party sector and the commercial sector. |
| Motorists who do not have motoring organisation membership or insurance-backed cover for breakdowns have ad-hoc use of vehicle breakdown and recovery services, normally from local garages, and are charged at the time of use. The private or retail sector is for individuals who belong to motoring organisations — such as the Automobile Association (AA), the Royal Automobile Club (RAC) and Direct Line's breakdown service — and who engage the recovery organisation in the event of a breakdown at no charge at the time. Providers such as Green Flag, Mondial Assistance and Europ Assistance offer breakdown services to individual motorists at no charge at the time, but are predominantly contracted through a third party, such as an affinity group, insurance company or car manufacturer. However, Green Flag and Europ Assistance also sell breakdown cover directly to individuals via online purchasing facilities on their websites. The commercial sector is for businesses with fleets of cars or commercial vehicles, but is not covered in this report in any depth. |
| For most of the last century, the AA and the RAC dominated the UK vehicle recovery industry. In the last 30 years, new entrants — notably Green Flag, Direct Line, Europ Assistance and Mondial Assistance — have increased competition in the market, particularly in the third-party sector. In the last decade, growth in the market slowed, partly as a result of the recession in the early part of the 1990s and competition between the main organisations. However, since 1999/2000, the industry has been revitalised by the change in ownership of the main motoring organisations providing vehicle breakdown cover. |
| The main motoring organisations, including the AA, RAC and Direct Line's breakdown service, have adopted strategies designed to offer more than vehicle breakdown services, resulting in much stronger customer relationships and expansion of the market. They have also adopted strategies to expand third-party provision. This has come at a time when car manufacturers have generally been extending warranty periods with the offer of vehicle breakdown and recovery assistance, many insurance companies have started to offer vehicle recovery and breakdown service options and a large number of affinity groups have added these services to member benefits. |
| The Government's 10-year plan for transport is designed to encourage the use of public transport and it will reduce the growth in road traffic between 2000 and 2010. Nevertheless, the underlying growth in the economic wealth, coupled with the desire for mobility and flexibility, will ensure the continued growth in private motoring. Although cars are becoming more reliable, the complexity of electronics in modern cars is increasing the requirement to call for assistance when a breakdown does occur. |
| The main perceived benefit for vehicle recovery services is a `get you home' service, yet more than 80 percent of vehicle breakdowns are solved at the roadside. Fast call-out and service within an hour are also important perceived benefits for vehicle recovery. Most vehicle recovery organisations have an average call-out of between 30 and 40 minutes, and over 90 percent of breakdowns are contacted within an hour. There are in excess of 8.5 million vehicle breakdown and recovery call-outs per year. The important main benefits of vehicle recovery vary by age, socio-economic class and geography, which is critical to the way vehicle recovery organisations promote their services. The use of main media advertising by recovery organisations declined considerably in 2002, but all major competitors reported increases in membership and sales. Much of this growth has come through third-party sales |
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Last updated by Amanda Porteous July 2003