12:38 pm, October 12, 2026
Chinese car manufacturers are responsible for virtually all the growth in Britain’s new car market this year, with established brands collectively struggling to increase their sales, according to Autotrader.
The online marketplace says the non-Chinese new car market has been broadly flat in 2026, despite an unexpected surge in overall registrations.
Speaking on the latest Car Dealer Podcast, Autotrader’s head of strategy and insights, Mark Palmer, said the speed of the Chinese brands’ success had taken the industry by surprise.
He believes aggressive pricing, attractive finance deals and changing consumer attitudes towards traditional manufacturers are behind the shift.
‘Nobody would have predicted this level of growth in the new car market, and it has primarily been the Chinese,’ he told hosts James Baggott and John Ray.
‘When we look at the market, the non-Chinese market is about flat year to date, and then the growth that’s come has come from Chinese brands.’
Palmer stressed that the picture varies considerably between established manufacturers, with some enjoying growth while others continue to struggle.
He highlighted Audi, Kia, Volvo and Vauxhall as brands performing well, while BMW, Hyundai and Nissan have seen declines.
But it is the arrival of new Chinese competitors which has dramatically changed the market, with Autotrader’s research revealing who is actually buying the cars.
According to Palmer, Chinese-brand customers are typically younger families on middle incomes, many with children under 18.
They are also particularly attracted to monthly finance payments of between £300 and £400, putting the newcomers between traditional volume and premium manufacturers.
‘They’re making really pragmatic choices,’ he explained.
‘They’ve got enough space for their family. There’s great value in the car. They really value safety and reliability.’
The changing buying habits are also having a major impact on customer loyalty.
Palmer said the proportion of drivers returning to the same manufacturer for their next car has fallen to around a third, compared with historic levels of 40% to 50%.
For electric car buyers, that figure is even lower, with just one in five sticking with the same badge.
‘We’re now in a brand promiscuity, a conquest market,’ he said. ‘Real change over the last couple of years.’
The transformation is also being felt in the used car market, although Palmer said the success of Chinese manufacturers has not resulted in an overall collapse in used car demand. Instead, buyers are changing the types of vehicles they choose.
Autotrader has recorded a decline in enquiries for premium-brand used cars aged between three and five years, with some shoppers increasingly considering new Chinese models, younger mainstream cars and used EVs instead.
Palmer said the biggest shift has been towards electric vehicles aged three to five years, as rising petrol and diesel prices encourage motorists to reconsider their running costs.
Autotrader also recorded a 19% year-on-year fall in diesel enquiries during September, while the average time taken to sell a used diesel rose to 34 days, around four or five days slower than the wider market.
Meanwhile, demand for used electric cars is proving strong enough that some stock is selling faster than it can be replaced.
‘We’re seeing supply of electric cars aged nought to seven falling really quickly,’ Palmer said.
‘They come in, they’re on the platform, they get sold. They can’t be replenished fast enough.’
Despite the pressures facing buyers, Palmer remains optimistic about the wider market.
Autotrader is forecasting around 10.2m combined new and used car transactions in 2026, which would make it the biggest market since 2019.
He said consumer confidence has held up better than expected, with the measure of households’ willingness to make major purchases at its strongest level since December 2021.
However, he acknowledged that rising costs and fierce competition mean growing sales volumes are not necessarily translating into an easier trading environment for dealers.
Palmer also warned franchised retailers to prepare for another push from manufacturers towards the end of the year as brands attempt to meet registration and ZEV mandate targets.
He urged businesses to examine projected used car values before agreeing to take additional stock, rather than relying solely on financial incentives offered by manufacturers.
‘The manufacturers will come knocking again at the back end of the year with targets and Z mandate targets,’ he warned.
‘The brand will come with some offer, but look at the data to see what that car is going to be worth in the retail market in 60 days’ time and use that data to negotiate with the brand.
‘Ask them for more if you need more.’
For Palmer, the key challenges facing dealers over the coming months will be managing the impact of fuel prices, keeping a close eye on the gap between retail and trade values, and ensuring any pre-registered vehicles can be sold profitably.
But he remains confident that demand for cars will hold up, even if consumers continue to change what they buy.
‘The market finds a way and the consumer finds a way,’ he said.