UK Vehicle Breakdown Services
This report provides an overview and analysis of vehicle breakdown services in the UK. The vehicle breakdown market serves a number of overlapping sectors, including the private/retail sector, the third-party sector, the commercial sector and the ad-hoc vehicle breakdown and recovery sector.
The market for breakdown services in the UK continues to grow and, in 2006, its value was estimated to have reached a new peak. Demand for these services is being fuelled by increases in the number of licensed vehicles in the UK, by rises in the number of vehicles on the roads and by increases in the number of 2-car households.
Many of the leading vehicle breakdown companies have recently changed ownership. The Automobile Association (AA) was acquired by CVC Capital Partners and Permira in 2004; the Royal Automobile Club (RAC) was acquired by Aviva PLC in 2005; and Britannia Rescue Services was acquired by Liverpool Victoria in February 2007. Vehicle breakdown companies are proving to be particularly attractive acquisitions for insurance companies, such as Aviva and Liverpool Victoria, as they allow them to capitalise on the brand's image and to develop complementary services. It is possible that the AA could also become a subsidiary of an insurance company at some time in the future.
Exclusive primary research undertaken for this report into consumer attitudes towards vehicle breakdown services indicated that some of the services offered by suppliers were more highly valued than others. The research also found that the age and sex profiles of members differ between the leading organisations and that regional differences in membership rates are present.
Main media advertising is an important promotional tool for the vehicle breakdown companies and, between the years ending 2002 and 2006, expenditure on this form of promotion increased by 71%. The vehicle breakdown companies use main media advertising to attract new members, communicate roadside awareness campaigns and to promote their breakdown and recovery operations.
The UK market for vehicle recovery services is forecast to show further growth up to 2011, boosted by the continuing increase in the numbers of cars on the road, further projected rises in the membership of vehicle breakdown companies and the popularity among motorists of the wide range of vehicle breakdown services available.
1. Introduction
BACKGROUND
ORIGINAL CONSUMER RESEARCH
2. Strategic Overview
MARKET DYNAMICS AND SEGMENTATION
DISTRIBUTION
New Car Registrations in the UK
Table 1: Number of New Car Registrations in the UK (000), Years Ending December 2002-2006
Table 2: Number of New Car Registrations in the UK by Sector (000), Years Ending December 2002-2006
Used Car Sales in the UK
Table 3: Annual Totals of Used Car Sales in Great Britain (000), Years Ending December 2002-2006
Number of Private Cars Licensed in the UK
Table 4: Number of Private Cars Currently Licensed in the UK (000), Years Ending December 2001-2005
Age Profile of Licensed Cars
Table 5: Motor Vehicles Registered in Great Britain by Year and Those Still Licensed in 2005 (000 and %), Selected Years Ending December 1980-2005
Table 6: Age of Licensed Motor Vehicles in Great Britain by Year of First Registration (000 and %), Years Ending December 1980-2005
Table 7: Cars Licensed in 2005 by Average Age of Car, Percentage First Registered in 2005 and by Government Regional Office (000, years and %), Year Ending December 2005
Number of Cars on UK Roads
Table 8: Total Number of Cars on UK Roads (000), Years Ending December 2001-2005
Public Road Lengths
Table 9: Public Road Length in Great Britain (kilometres), Years Ending December 2001-2005
Table 10: Public Road Length by Class of Road in Great Britain (kilometres and %), Year Ending December 2005
Road Traffic
Table 11: Road Traffic in Great Britain — Total Distance Travelled by Cars and Taxis (billion vehicle kilometres and index 2001=100), Years Ending December 2001-2005
Table 12: Road Traffic in Great Britain — Total Distance Travelled by Cars and Taxis by Class of Road (billion vehicle kilometres and %), Year Ending December 2005
Average Yearly Mileage
Table 13: Annual Mileage of Cars by Type in Great Britain, Years Ending December 2002-2005
Table 14: Average Yearly Mileage by Car-Owning Households by Sex (% of adults), 2006
Car Ownership
Table 15: Car Ownership per Household in Great Britain by Number of Cars Owned (% of households), Years Ending December 2002-2006
Table 16: Number of Private Motoring, Full Car Driving Licence Holders in Great Britain by Sex (million), Years Ending December 2002-2005
Table 17: Percentage and Number of Private Motoring, Full Car Driving Licence Holders in Great Britain by Age (% of age group and million), Years Ending December 2002-2005
Costs of Motoring
Table 18: Costs of Running the Average Car (£), September 2003-2006
MOT Statistics
Table 19: Road Vehicle Testing Scheme (MOT) Test Results for Cars and Other Passenger Vehicles (million and %), Years Ending March 2002-2006
Table 20: Road Vehicle Testing Scheme (MOT) — Percentage of Cars and Other Passenger Vehicles Failing by Selected Type of Defect (%), Years Ending March 2001-2005
Main Causes of Vehicle Breakdowns
Table 21: Most Common Reasons for RAC Breakdown Call-Outs in the UK (number), 2006
Road Traffic Accidents
Table 22: Number of Road Traffic Accidents Involving Car Drivers and Passengers in Great Britain (000), Years Ending December 2001-2005
COMPETITIVE STRUCTURE
Table 23: Estimated Membership of the Main Motoring Organisations (million and %), Years Ending December 2002-2006
Number of Patrol Call-Outs
Advertising
Table 24: Main Media Advertising Expenditure on Vehicle Recovery Services (£000), Years Ending September 2002-2006
THE CONSUMER
Overview
Table 25: Membership/Non-Membership of Vehicle Breakdown Organisations (% of respondents who drive), 2007
MARKET FORECASTS
3. The Vehicle Breakdown Market
BACKGROUND
Market Sectors
MARKET SIZE
Table 26: The Estimated UK Market for Vehicle Recovery Services by Value (£m), Years Ending December 2002-2006
CONSUMER TRENDS
Average Distance Travelled per Year
Table 27: Average Distance Travelled by Mode of Transport in Great Britain (mileage per person per year), Mid-January 2002-2005
Average Number of Trips
Table 28: Trips and Average Length of Trip by Car/Van Drivers in Great Britain per Person per Year (number of trips and mileage), Mid-January 2002-2005
Trips per Person per Year by Distance Travelled
Table 29: Trips per Person per Year by Distance by Car/Van Drivers in Great Britain (mileage per person per year), Mid-January 2005
Time Spent Travelling
Table 30: Average Total Time Spent Travelling per Year and Average Duration of Trip by Car/Van Drivers in Great Britain (hours and minutes), Mid-January 2002-2005
Company and Private Car Travel Trends
Table 31: Annual Mileage of Four-Wheeled Cars by Type of Car and Purpose of Trip in Great Britain (annual mileage), Mid-January 2005
MARKETING ACTIVITY
ADVERTISING
Table 32: Main Media Advertising Expenditure on Vehicle Recovery Services (£000), Years Ending September 2005 and 2006
4. An International Perspective
INTRODUCTION
INTERNATIONAL ROAD NETWORKS
Table 33: Length of Road Network by Country and Category in the EU-25 (000 kilometres), 2003
MAIN COUNTRIEs — ROAD NETWORKS
The US
China
Japan
Russia
Table 34: Transport Network in the EU-25 and Selected Other Countries (000 kilometres), 2003
5. PEST Analysis
POLITICAL FACTORS
Road Safety Act 2006
Speed Limit Amendments
Tough New Penalties for Illegal Mobile Telephone Use
Institute of Advanced Motorists Motoring Trust
ECONOMIC FACTORS
Increases in the Cost of Motor Insurance
Increases in the Costs of Running a Car
Road Pricing the `Only Answer' to Cut UK Traffic Jams
Hard Shoulder Used on M42 to Cut Congestion
SOCIAL FACTORS
More Women Applying for Motor Trade Apprenticeships
Work Wise UK
Hard Shoulder Rules
Company Drivers Flaunting Health and Safety Guidelines
Low Levels of Vehicle Care
TECHNOLOGICAL FACTORS
Technical Accreditation for Roadside Patrols
Japanese Dominate Reliability Survey
Vehicle Technologies
6. Consumer Dynamics
OVERVIEW
DRIVERS AND NON-DRIVERS
Table 35: Drivers and Non-Drivers of Any Type of Motor Vehicle (% of respondents), 2007
ORGANISATION MEMBERSHIP
Table 36: Vehicle Recovery Organisation Membership by Organisation (% of respondents who drive and are members of a vehicle recovery organisation), 2007
PERCEIVED BENEFITS OF MEMBERSHIP
Overview
Table 37: Overview of Perceived Benefits of Membership of a Vehicle Recovery Service (% of respondents who drive and are members of a vehicle recovery organisation), 2005 and 2007
Best Overall Value for Money
Table 38: Best Overall Value for Money Compared With Other Services as a Perceived Benefit of Vehicle Recovery Membership (% of respondents who drive and are members of a vehicle recovery organisation), 2007
Relay/`Get You Home'
Table 39: Relay/`Get You Home' Service as a Perceived Benefit of Vehicle Recovery Membership (% of respondents who drive and are members of a vehicle recovery organisation), 2007
Fast Call-Out
Table 40: Fast Call-Out as a Perceived Benefit of Vehicle Recovery Membership (% of respondents who drive and are members of a vehicle recovery organisation), 2007
Service Within the Hour
Table 41: Service Within the Hour as a Perceived Benefit of Vehicle Recovery Membership (% of respondents who drive and are members of a vehicle recovery organisation), 2007
Women Attended to as a Priority
Table 42: Women Attended to as a Priority as a Perceived Benefit of Vehicle Recovery Membership (% of respondents who drive and are members of a vehicle recovery organisation), 2007
Provision of Hire Cars During Repairs
Table 43: Hire Car Available During Repairs as a Perceived Benefit of Vehicle Recovery Membership (% of respondents who drive and are members of a vehicle recovery organisation), 2007
7. Company Profiles
THE AUTOMOBILE ASSOCIATION LTD
Corporate Strategy
Advertising
Profitability
Table 44: Financial Results for the Automobile Association Ltd (£000 and %), Years Ending 31st December 2003-2005
Recent and Future Company Developments
BRITANNIA RESCUE SERVICES LTD
Corporate Strategy
Advertising
Profitability
Table 45: Financial Results for Motoring and Leisure Services Ltd (£000 and %), Years Ending 31st December 2003-2005
Recent and Future Company Developments
EUROP ASSISTANCE HOLDINGS LTD
Corporate Strategy
Advertising
Profitability
Table 46: Financial Results for Europ Assistance Holdings Ltd (£000 and %), Years Ending 31st December 2003-2005
Recent and Future Company Developments
GREEN FLAG LTD
Corporate Strategy
Advertising
Profitability
Table 47: Financial Results for Green Flag Ltd (£000 and %), Years Ending 31st December 2003-2005
Recent and Future Company Developments
MONDIAL ASSISTANCE (UK) Ltd
Corporate Strategy
Advertising
Profitability
Table 48: Financial Results for Mondial Assistance (UK) Ltd (£m and %), Years Ending 31st December 2003-2005
Recent and Future Company Developments
RAC PLC
Corporate Strategy
Advertising
Profitability
Table 49: Financial Results for RAC PLC (£000 and %), Years Ending 31st December 2003-2005
Recent and Future Company Developments
8. The Future
CAR USE CONTINUES TO INCREASE
THE CAR MARKET
EXPANSION PLANS OF THE MAJOR COMPANIES
MORE CARS ON THE ROAD
ADVERTISING EXPENDITURE CONTINUEs TO RISE
CONSUMER BEHAVIOUR
FORECASTS 2007 TO 2011
Table 50: The Forecast UK Market for Vehicle Recovery Services by Value (£m and index 2007=100), 2007-2011
9. Consumer Confidence
METHODOLOGY
KEY FINDINGS THIS QUARTER
THE WILLINGNESS TO BORROW
Confidence Improves
Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Willingness to Borrow Slips Slightly
Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007
SPENDING FROM SAVINGS
Slight Increase in Spending from Savings
Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007
Saving Grows in Relative Importance
Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007
10. Further Sources
