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Automotive Services Market Report 2002


Description: The automotive services market includes car servicing and mechanical repairs, car body repairs, and breakdown and recovery services. In 2001, the collective value of these amounted to an estimated £12.98bn and the value of these services increased by a total of 11% from £11.65bn, in 1997. During the 5-year period to 2001, the growth trend for the industry was very moderate, despite the steady increase in the number of vehicles on the road. Strong competition for business, longer warranties for new vehicles, the better quality and durability of parts and sub-assemblies and longer service intervals were all factors influencing the level of demand. In terms of relative size, the automotive services market is dominated by car servicing and mechanical repair, followed by car body repairs and car breakdown and recovery services. There are a number of different providers of motoring services within the industry. Franchised car dealers and independent garages compete with each other in the aftercare market, although in general, the franchised dealers' garages obtain the bulk of the warranty work. This normally lasts for around 3 years - the length of the warranty period - after which the independent garages begin to take over, and servicing intervals become more irregular. Insurance companies, banks and even a gas and electricity company have become heavily involved in the automotive services industry. They have taken over some of the leading providers of both repair and rescue services while continuing with their longer-standing activities. Removal of block exemption could bring other non-automotive organisations, such as supermarket chains, into the industry as sellers of low-price cars but probably not as providers of aftercare. The automotive services industry will be transformed by recent developments in its structure and organisation. As the car manufacturers will have less control over their dealerships, new companies will be attracted into this market because of the removal of restrictions on sales of new vehicles. The larger dealerships will seek to expand into a few mega dealerships and some manufacturers will try to protect their prestige brands by buying and operating their own exclusive sites. Car ownership has already reached saturation levels, but this is not likely to deter a high level of new purchases every year by private, company and fleet buyers. Most people regard the car as indispensable to their lives, regardless of the high costs of maintaining them, so the demand for automotive services will increase. The rate of increase will, however, be slow, as recommended servicing intervals are extended by the manufacturers, automotive components and oils and lubricants are made more durable and reliable, on-board computers give early warning of potential faults and cars are likely to be scrapped earlier despite their longer life, as new ones become cheaper to buy. The automotive services market is therefore expected to grow by 10.7% from 2002 to 2006, which approximately continues the same trend rate of growth in value terms as in the previous 5 years.


Contents: Executive Summary 1 1. Market Definition 7 REPORT COVERAGE 7 MARKET SECTORS 7 Car Servicing and Mechanical Repairs 7 Car Body Repairs 8 Car Breakdown and Recovery Services 8 Table 1: UK Automotive Services and Suppliers, 2002 9 MARKET TRENDS 9 The UK 9 Franchised Car Dealers 10 Independent Garages 10 Garage Chains and Autocentres 11 Car Body Repair Shops 11 Breakdown and Recovery Organisations 12 Fast-Fit Centres 12 Mobile Service Units 13 MARKET POSITION 13 The UK 13 Overseas 13 2. Market Size 15 THE TOTAL MARKET 15 Table 2: Total UK Expenditure on the Main Automotive Services by Sector by Value (£m and %), 1997-2001 15 BY MARKET SECTOR 15 Car Servicing and Mechanical Repair 15 Car Body Repair 16 Car Breakdown and Recovery Services 17 3. Industry Background 18 RECENT HISTORY 18 Breakdown and Recovery Services 18 Car Body Repair Shops 18 Fast-Fit Centres 19 Franchised Car Dealers 19 Garage Chains and Autocentres 19 Independent Garages 19 Mobile Service Units 20 Table 3: UK Outlets Offering Automotive Services by Type (number of outlets and %), 2001 20 NUMBER OF COMPANIES 20 Leading Franchised Car Dealers 20 Table 4: Leading Franchised Car Dealers by Number of Outlets, 2002 21 Lex Service PLC 22 EMPLOYMENT 22 HOW ROBUST IS THE MARKET? 22 Table 5: Penetration of Most Recently Obtained Cars by Vehicle Registration Date by Volume (000 adults and %), 2001 23 LEGISLATION 24 KEY TRADE ASSOCIATIONS 24 Automobile Association 24 Automotive Aftermarket Association 25 Automotive Distribution Federation 25 The Automotive Service Association 25 British Rubber Manufacturers Association 25 Direct Line Rescue (formerly Green Flag National Breakdown) 25 National Tyre Distributors Association 25 Royal Automobile Club Ltd 26 The Retail Motor Industry Federation 26 Society of Motor Manufacturers and Traders 26 4. Competitor Analysis 27 THE MARKETPLACE 27 Franchised Car Dealers 27 Table 6 : Selected Leading Car Dealers by Turnover (£m), 2000/2001 28 Leading Car Dealers 28 Arriva PLC 28 CD Bramall PLC 29 Dixon Motors PLC 29 Inchcape PLC 29 Lex Service PLC 30 Lookers PLC 30 Pendragon PLC 30 Reg Vardy PLC 31 Ryland Group PLC 31 Breakdown and Recovery Organisations 31 MARKET LEADERS 32 Breakdown and Recovery Organisations 32 The Automobile Association Ltd 32 Company Structure 32 Financial Results 32 Green Flag Group Ltd 33 Company Structure 33 Financial Results 33 The Royal Automobile Club Ltd 33 Company Structure 33 Financial Results 33 Fast-Fit Centres 34 Halfords Ltd 34 Company Structure 34 Current and Future Developments 34 Financial Results 34 Kwik-Fit Holdings Ltd 34 Company Structure 34 Current and Future Developments 35 Financial Results 35 Stapletons (Tyre Services) Ltd 35 Company Structure 35 Current and Future Developments 35 Financial Results 35 Other Major Fast-fit Companies 36 OUTSIDE SUPPLIERS 36 Car Parts 36 Fast-Fit Centres 37 Franchised Car Dealers 37 Garage Chains and Autocentres 37 Garage Equipment 38 Independent Garages 38 Mobile Service Units 38 Motor Finance 39 Tyres 39 ADVERTISING AND PROMOTION 40 Motor Components and Accessories 40 Table 7: Advertising Expenditure on Motor Components and Accessories for the Aftercare Market (£000), Year Ending June 2002 41 Tyres and Exhaust Centres 41 Table 8: Advertising Expenditure on Tyres and Exhaust Centres (£000), Year Ending June 2002 42 Breakdown Services 42 Table 9: Advertising Expenditure by Breakdown Services (£000), Year Ending June 2002 43 Servicing and Tuning 43 Table 10: Advertising Expenditure on Servicing and Tuning (£000), Year Ending June 2002 43 5. Strengths, Weaknesses, Opportunities and Threats 44 STRENGTHS 44 WEAKNESSES 44 OPPORTUNITIES 45 THREATS 45 6. Buying Behaviour 47 CONSUMER PENETRATION 47 Car Servicing 47 Demand For Vehicles 48 Used Vehicles 48 Brokers and Internet Services 49 OTHER SERVICES 49 7. Current Issues 50 BLOCK EXEMPTION 50 THE INTERNET 50 ACCIDENT DAMAGE 51 END OF LIFE VEHICLE 51 8. The Global Market 52 THE US MARKET 52 EUROPE AND THE NETHERLANDS 52 NEW PRODUCT DEVELOPMENT 52 LEGISLATION 52 9. Forecasts 53 INTRODUCTION 53 EXPENDITURE ON MAIN AUTOMOTIVE SERVICES 53 Car Servicing and Mechanical Repair 53 Car Body Repair 54 Car Breakdown and Recovery 54 FORECASTS 2002 TO 2006 55 Table 11: Forecast Total UK Expenditure on the Main Automotive Services by Sector by Value (£m and %), 2002-2006 55 FUTURE TRENDS 55 10. Company Profiles 56 aUTOMOBILE aSSOCIATION developments LTD 57 Halfords LTd 59 Kwik-fit Holdings Ltd 61 Nationwide Accident Repair Services Plc 63 tHE ROYAL AUTOMOBILE CLUB LTD 65 Ugc Ltd 67 11. Further Sources 69 Associations 69 Periodicals 71 Directories 72 General Sources 73 Bonnier Information Sources 74 IGovernment Publications 75 Other Sources 75




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