9:06 am, May 2, 2023
New car registrations are expected to exceed expectations this year while sales of used cars are likely to surpass seven million, as the market swings from a ‘pull’ to a ‘push’ trend.
The predictions come from Cox Automotive which has created baseline, upside and downside scenarios for each market in its latest AutoFocus insight update report.
The baseline is, the company believes, the most likely scenario to materialise.
Thanks to a surprisingly strong performance last year and in Q1 2023, Cox Automotive believes this year will end with 1,942,667 registrations – a 13.5 per cent lift on last quarter’s forecast (1,711,447).
The prediction added the market will see 476,691 new registrations in Q2, a 16.4 per cent improvement on the forecast published at the start of the year (409,378), while Q3 is on track to end with 558,803 new vehicle registrations.
The forecast includes ever strengthening sales of EVs and the ‘quicker-than-anticipated emergence of new Chinese brands in the UK’, said the company.
The net result is a 20.4 per cent year-on-year increase, although this remains 15.9 per cent behind pre-pandemic levels.
For used cars, Cox Automotive’s predicts 7,096,932 transactions during 2023 – a 3.2 per cent year-on-year improvement. Q2 is expected to deliver 1,832,842 transactions, while Q3 is predicted to see 1,866,540 transactions.
Philip Nothard, Cox Automotive’s insight and strategy director, said: ‘It’s heartening to once again unveil an upbeat sector forecast.
‘So many challenges that have dominated our commentary on new and used markets for successive quarters are finally fading. That’s not to say that the road ahead is free from obstacles and the visibility is crystal clear, but we progress towards the halfway point of 2023 in a better position than many dared hope.
‘Our revised new vehicle forecast reflects the confirmation of 2022’s registration figures and evidence gathered throughout Q1 that manufacturers are returning to a “push” market.
‘More than 85m cars and LCVs were manufactured in 2022, a 6.08 per cent year-on-year increase and a drastic improvement on the lows of 77m seen in 2020.
‘With supply chains now approaching where they need to be, manufacturers can once again ramp up production and define the volume of vehicles that are supplied to the market, as opposed to the demand-driven “pull” market we’ve experienced since the first lockdown.’
On the used market, Nothard added: ‘We’ve reviewed all the relevant data points and remain confident in our existing forecasts.
‘It would be understandable to look at what’s happening with new registrations and conclude that this performance will naturally translate over to the used market. Still, we must remember that most of today’s new vehicles will not be seen in the used market until 2026, and possibly longer still if predictions of fleets and private buyers retaining vehicles for longer prove to be accurate.
‘We must also remember that the used market continues to be impacted by huge volume lost over the past three years; some 42m fewer vehicles were made globally in this period compared to the previous three years.
‘This equates to 2.3m vehicles that should’ve entered the UK’s used market around now but never did.
‘Nevertheless, the fact that we’re looking at completing more than seven million used car transactions this year is a very positive position to be in.’
