The Market and Competitive Environment Flashcards
1
Q
New car sales - Uk is the 7th largest market for new vehicles
A
- many customers look to buy a car during the first month of the registration to maximise the prestige of driving a brand new car
- about 1/5th of car sales consist of newly registered cars
- affected by covid - newly registered cars reduced by 28.7%
- a total of 1.65mil new cars were registered in 2021 - due to economic climate , the cost of living crisis, supply chain issues caused by war in Ukraine
2
Q
popular cars
A
- most popular car in the UK is Nissan Qashqai - 42,704 sold in 2022
- past years - Ford Fiesta was the most popular selling cars for 10 years
- the vauxhall corsa, 2021’s top selling car - also saw high sales during 2022.
- best selling brand in Britain for new cars - Volkswagen with 147,826 new cars
3
Q
Diesel
A
- historically the most popular fuel type and made up over half of all new vehicle registrations in 2015
- customer demand for diesel started to reduce and in 2018 and 2019
- over half of all vehicles registered in the UK were fuelled by petrol
- since 2019 ev have increased significantly in popularity, especially hybrid electric (petrol) and battery electric
4
Q
Used car market
A
- cars are one of the most popular assets which sold second hand - estimated over 7.5mil second hand cars were sold in 2021
During covid19 - the used car market fell by 15%
5
Q
popular brands for used cars
A
- Ford fiesta
- followed by vauxhall cross
- Ford Focus
- ford is the most popular brand in the uk for used cars with an 11.92 % market share - vauxhall 10% 2022
- used EVs account for less than 1% of the car market
6
Q
Arnold clark
A
- 200 car dealerships in Scotland and England.
- business now sells 300,000 cars annually and has over 20,000 cars in stock
- they also operate accident repair centres, service centres, vehicle insurance and car rentals
7
Q
Retail options
A
- buying a car online is fast becoming customer’s most preferred method of buying - covid accelerated this development
- if customers finally visit a car showroom and buy the vehicle from a physical location, they are likely to have looked online first
- 10% of the car market is online
8
Q
MNCs
A
Benefits - EOS - consumer surplus, tend to own several brands, creating jobs , creating incentive to innovate, bringing in skills and expertise
9
Q
Competitiveness of the car sales industry
A
Porter’s 5 forces
10
Q
Threat of substitutes
A
- traditionally customers always visited the same dealership when wanting to buy a used or new car
- sales people developed a positive relationship with customers
- customers are less loyal and market is more transparent - income elastic
- however public transport can be a substitute due to geographic reasons
11
Q
Bargaining power of buyers
A
- modern customers are more price sensitive - have a wide range of choice
- all firms want to make a profit
12
Q
Threat of new entrants
A
- applicable to those original firms who have capital
- numerous new retailers entering car sales
- online retailers are a key development - offer customers more competitive prices as they don’t have physical overheads such as dealership premises
13
Q
Bargaining power of suppliers
A
- many dealerships are tied to specific brands so dealers can only buy from specific suppliers for specific components
- large cost of changing suppliers
14
Q
Degree of rivalry
A
- lots of different car retailers
- two markets - luxury and cost leaders
15
Q
(S)wot analysis
A
- uk customers tend to be loyal to products made domestically
- access to government financial support - specially in specific areas
