Wednesday 1st February 2023
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"New Car Sales"

New car sales in the UK won't rebound to pre-Covid levels this decade, according to new data from market analyst Auto Forecast Solutions (AFS).

The firm has predicted that registrations this decade will peak at 2.1 million in 2029, following steady upward growth. That’s 200,000 fewer than in the last pre-Covid year, 2019, and almost 600,000 short of 2016’s record 2,692,786.

AFS vice-president Sam Fiorani explained to Autocar Business: “In the short term, the threat of a global recession is holding down the possibility of a quick rebound from the current Covid/semiconductor-driven slowdown in the automotive industry. 

“Residual effects will hurt the industry, especially in developed regions like the UK, [the] EU and North America, through 2023 and possibly into 2024.

“[In the] longer term, the conversion to electric vehicles will dampen the market’s sales growth. More expensive electric vehicles will not replace traditional ICE models one for one over the next decade.

"Additionally, more reliable ICE vehicles are slowing the need for regular replacements, pushing the average age of vehicles on the road today to well above 12 years. 

“Rising prices, due to recent parts shortages and the manufacturers’ concentration on higher-trim models, continues to push buyers into the pre-owned markets, which has until very recently propped up used-vehicle prices considerably.

“Specific to the UK, the market’s recovery from Brexit will be gradual and will not be helped by the new higher interest rates. With interest rates as low as they have been for as long as they have remained, it will take time for consumers and businesses to readjust to this new situation.

"These are among the main factors stifling growth in the region over the next few years.”