Cox Automotive has upgraded its forecasts for the new and used car sectors after the UK saw a strong start to the year.

Cox is now predicting that the UK will end 2023 with 1,942,667 registrations, up 13.5% on its previous prediction, which was issued last quarter

Following 2022’s “surprisingly strong” performance, and confirmation that Q1 of 2023 has continued this positive trend, Cox’s revised baseline forecast – the most likely outcome – for the full year predicts the UK will end 2023 with 1,942,667 registrations, up 13.5% on the 1,711,447 in its previous prediction, which was issued last quarter.

Published in Cox Automotive’s latest AutoFocus insight update, the updated forecast indicates we’ll see 476,691 new registrations in Q2, a 16.4% 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.

Philip Nothard, insight and strategy director, said: “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 added that Cox’s figures follow Q1 evidence that manufacturers are returning to a ‘push’ market.

He elaborated: “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.”

The new car forecast also reflects clearer insights on the two most influential dynamics within the new market: the influence of EVs as a proportion of new registrations and the quicker-than-anticipated emergence of new Chinese brands in the UK.

Cox Automotive has also published its used car forecast, which predicts that the UK market will see 7,096,932 transactions during 2023, a 3.2% year-on-year improvement. Q2 is expected to deliver 1,832,842 transactions, while Q3 is predicted to see 1,866,540 transactions.

Nothard added: “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 42 million fewer vehicles were made globally in this period compared to the previous three years. This equates to 2.3 million 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.”

The full details of Cox Automotive’s latest new and used car forecasts can be read in issue nine of its AutoFocus insight update.