Forecast Sees U.K. New Car Market Recovery Steady for 2023

Bolstered by improving vehicle production that should meet customer demand, the U.K. new car market promises to continue its slow but steady recovery for the rest of the year, according to the latest Cox Automotive forecast.

The automotive services provider’s forecasts, published in its recent AutoFocus update, consider a baseline, upside and downside scenario for the new market. The baseline forecast for total new car registrations in 2023 is 1,921,436, a significant increase of nearly 20% compared to 2022 figures but still lower (-16.9%) than pre-pandemic yearly registrations.

Considering recent indicators, Cox Automotive believes the baseline continues the most likely scenario to materialize in Q3 and Q4. That scenario — which forecasts the sale of 558,803 vehicles in Q3 and 412,913 in Q4 — assumes the U.K.’s projected economic recovery will remain on track and the entry of new OEMs into the U.K. market will have a limited impact on pricing and volumes for long-standing OEMs. Those factors will result in a slower-than-desired adoption rate by consumers and businesses alike, according to the Autofocus update.

“The new car market is going through arguably its most significant change in decades, an evolution driven by electrification, new players entering the arena and changes to how new cars are sold,” said Philip Nothard, Cox Automotive insight and strategy director.

While the market sector faced numerous challenges over the past three years, the recovery indicators from the beginning of the year “characterize what remains of these 12 months,” Nothard explained.

He added that the sector’s evident transformation prompts a re-evaluation of how to proceed in both the physical and digital realms and how to best implement an omnichannel approach.

In the franchised dealer sector, Nothard sees confirmation of accelerated consolidation, especially in a market that needs to attract investors and adapt to changing OEM attitudes that place profitability above sheer volume.

“The industry is aiming to reconcile agency strategies, historic franchise agreements and a hybrid approach that blends the two in an increasingly divided and diverse world,” he said. “These complexities unfold amid what can only be described as a critical juncture in the journey toward an electrified, net-zero future.

“As consumer behavior shifts, the industry must adapt and align its strategies to meet the demands of an evolving market. With electrification serving as a driving force, the challenges and opportunities in this transition period will shape the future landscape of the automotive industry.

“Success will hinge on the ability of stakeholders to nimbly traverse these complexities. They must forge new partnerships and embrace sustainable practices that will hopefully lead them into a thriving net-zero era.”

The AutoFocus update is available on the Cox Automotive website.