NEW car registrations could hit the three-million mark in the next five years, according to Nigel McMinn, MD of Manchester-based motor retail group Lookers.
Talking exclusively to Trade Plates TV, McMinn said: ‘We constantly find ourselves asking this question and debating what the new car market will look like in the next five to 10 years – we always seem to be waiting for another big crash in new registrations, like the one in 2008.
‘At Lookers, we’ve looked back over the past 60 years and noticed a fairly familiar pattern. If you look at the data, you’ll spot that every 15 years there will be a dip in registrations, followed by a 10 to 12-year recovery.
‘The average market of every 15-year period grows by about half a million registrations. We talk about the normality being 2.4m between 2000 and 2015, but in the previous 15 years it would’ve been 1.9, and 1.4 before that. This will probably average out to 2.5m by 2030, but it’s possible that it could hit three million in the next five years.’
He added: ‘It follows the cyclicality of the economy and the growth in population.’
Both population and economic conditions have shortened the car change cycle, but McMinn sees PCP as the key culprit, which encourages buyers to swap their car for a new one every three to five years.
‘We live in a society where customers buy everything monthly because it’s more convenient and easier to manage,’ McMinn said.
‘Demand says GDP should still grow. Last year, pent-up demand helped fuel the market growth to seven per cent against GDP of 2.2 per cent. We think that’s all set to continue for the next few years.’
Lookers believes that encouraging customers to renew their PCPs will help to fuel new car sales, while also generating high-quality stock for used car dealers.
In March this year, Lookers posted record profits from its network of 160 dealerships across the country.
Watch the interview in full below.
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