News analysis


“The new car market is


increasingly bullish.”


On the up


New car market forecasts have seen significant upgrades following a strong start to the year. Sean Keywood reports.


Data firm Cox Automotive said its baseline forecast – the most likely scenario – for the year was now for 1,942,667 new car registrations – a 13.5% increase compared with its previous prediction, issued three months ago.


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Separately, the Society of Motor Manufacturers and Traders (SMMT) announced that it had upgraded its own annual sales forecast from 1.79million to 1.83million.


Cox Automotive said that overall market sentiment had been boosted by a “surprisingly strong” performance in 2022, and by Q1 of 2023 continuing with this positive trend.


As for the used car market, it continues to predict 7,096,932 transactions, which would be a 3.2% year-on-year improvement. Cox Automotive insight and strategy


he UK new car market is set to see many more sales in 2023 than previously forecast, according to industry analysts.


director Philip Nothard 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.”


Nothard said the revised new market forecast reflected confirmation of 2022’s registration figures, and evidence gathered during the first quarter of this year that motor manufacturers were returning to a ‘push’ market.


He said: “More than 85 million cars and LCVs were manufactured in 2022, a 6.08% year-on-year increase and a drastic improvement on the lows of 77 million 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.”


Cox’s forecast is also said to account for the sector having a clearer picture of what it said were the two most influential dynamics within the market – the influence of EVs, and the emergence of new Chinese brands. The SMMT said its own improved forecast was caused by strong market performance for the first four months of 2023, up by 16.9% year-on-year. However, it said concerns about energy costs and charging infrastructure had caused it to downgrade its pure EV market share prediction from 19.7% to 18.4%. SMMT chief executive Mike Hawes said: “The new car market is increasingly bullish, as easing supply chain pressures provide a much-needed boost. However, the broader economic conditions and chargepoint anxiety are beginning to cast a


cloud over the market’s eagerness to adopt zero-emission mobility at the scale and pace needed.


“To ensure all drivers can benefit from electric vehicles, we need everyone - government, local authorities, energy companies and charging providers - to accelerate their investment in the transition and bolster consumer confidence in making the switch.”


On the subject of the used market, the SMMT has announced 4.1% year-on-year growth in the first quarter of the year, with 1,847,149 transactions.


It said this growth was welcome following three consecutive quarters of decline, and was the best start to a year seen since 2020, which it attributed to growth in the new car market improving availability.


However, the market remained 8.6% below pre-pandemic levels, which the SMMT said reflected the ongoing impact of supply challenges and consumer sentiment in light of the wider economic backdrop.


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