Car Market - Purchase and Ownership - UK - June 2005

About this report

This is the first time that Mintel has commissioned a Special Report which examines the current status, recent developments and the immediate prognosis for the UK market for new cars, focusing specifically on car ownership and usage aspects. This report explores the hypothesis that car ownership in Britain in the early 21st Century is an integral part of British lifestyles, not just as a mode of transport but also for social and leisure lifestyles.

Mintel believes that the UK car market is currently at something of a crossroads as suppliers contend with softening demand albeit relative to the boom years of 2001-03 which had culminated in all-time high in new registrations. This purple patch  had been sustained on the back of falling prices post-the 1999 Competition Commission Report, the unleashing of pent-up demand for new cars following a period of consumer uncertainty in the wake of that report and, critically, a favourable economic climate especially in terms of ultra low interest rates. Indeed, the official Bank of England base rate as of Autumn 2003 had been at their lowest point since the mid 1960 s - a telling factor.

These low lending rates coupled with rising personal disposable income (PDI) and a booming housing market had encouraged high levels of consumer confidence, unleashing spend on major durables such as cars. In short, 2001-03 represented a veritable golden age  for the UK car market in its recent history in which keen prices, low interest rates and upbeat consumer confidence unleashed a credit-led spending boom on new cars, the ultimate consumer durable.