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New car registrations are set to slowly improve sector for the rest of 2023, supported by recovering vehicle production meeting customer demand.
Cox Automotive has delivered its baseline forecast for total new car registrations in 2023 at 1,921,436, representing a significant increase of nearly 20% compared to 2022 figures but still lower (-16.9%) than pre-pandemic yearly registrations.
Taking recent indicators into account, Cox Automotive believes that the baseline continues to be the most likely scenario to materialise in Q3 and Q4. That scenario, which forecasts the sale of 558,803 vehicles in Q3 and 412,913 in Q4, includes a belief that the UK’s projected economic recovery will remain on track and that the entry of new OEMs into the UK market will have a limited impact on pricing and volumes for long-standing OEMs. That will result in a slower-than-desired adoption rate by consumers and businesses alike.
Philip Nothard, insight and strategy director at Cox Automotive said: “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.
“This sector has faced numerous challenges over the past three years and the shoots of recovery that it showed at the beginning of the year will, we think, characterise what remains of these 12 months.”
In the franchised dealer sector, Nothard sees much evidence for “accelerated consolidation”.
He added: “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.
“These complexities unfold amid what can only be described as a critical juncture in the journey toward an electrified, net-zero future.
“As consumer behaviour 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.”