11:13 am, November 22, 2024
The new car market will rise slightly next year despite manufacturers and dealers dealing with a number of new challenges.
That is is according to fresh research from Auto Trader which is forecasting around 1.98m UK registrations in 2025.
That figure represents a 2% rise on 2024’s 1.94m, even though manufacturers and retailers will be battling stricter regulatory targets, uncertain brand loyalty, and increased competition for market share.
If the forecast is correct, 2025 will be the fourth consecutive year of growth, despite still being 14% down on pre-pandemic levels, with 2.31m registrations recorded in 2019.
Auto Trader’s experts say that this year, the new car market returned to ‘push’ dynamics, albeit to a lesser extent than pre-pandemic levels, with discounts rising to 9% in October, up from 7.4% 12 months earlier.
Despite this, EV market share in 2024 is predicted to reach just 18%, short of the 22% ZEV requirement.
Meanwhile, private new car sales are expected to be down 27% this year at 740,000 units, compared to 2019’s circa 1 million, making it the lowest level in over two decades.
This can partially be explained by skyrocketing new car prices, with the average rising from £31,000 in 2019 too £43,020 in 2024.
The influx of new brands, particularly from China, have also made their presence felt, with next year set to get underway with 17 additional brand – and 81 models – when compared to pre-pandemic levels.
‘Extremely resilient’ used car market set to rise
Despite the political instability of a general election and a challenging economic backdrop, used car demand remained extremely resilient this year, as reflected in the 970.6m visits to Auto Trader over the last 12 months – 74m more than the same period last year.
With such strong fundamentals, and an improving economic outlook, Auto Trader expects the used car market to maintain the strong growth momentum of the last two years and rise from an estimated 7.61m sales this year to around 7.7m in 2025.
Although at 1% year-on-year, it’s behind the 5% annual increase recorded since 2022, it means the market will be within just 3% of pre-pandemic volumes and stock should continue to turn over at a similarly fast pace as seen in 2024.
Commenting on the forecast, Auto Trader’s commercial director, Ian Plummer, said: ‘It has been another landmark year for automotive retailing, one that’s included a range of challenges, not least the introduction of ZEV targets, constrained supply, changing finance rules, and the budget, but also exceptionally strong used car demand, record levels of engagement on our platform, rapid speed of sale, and the stabilising of retail prices.
‘And with the more attractively priced and available stock in recent months helping to fuel new car interest, the overall retail market is entering 2025 on a strong footing.
‘2025 is set for growth, but this year’s complexities will remain, and in some cases, tighten, particularly within the new car market, where a rapidly growing array of brands will be competing for the attention of an increasingly fickle new EV buyer.
‘Brands and retailers alike cannot afford to standstill and will need to adopt a conquest mindset next year, as well as focusing on what they can excel at – delivering great product, a great experience, and a great performance, all of which we’ll continue to support through our technology, data and our investments.’
