UK new car registrations are on track to hit some 1.9 million units for 2023; up 20% from 2022 but still some 17% lower than pre-pandemic.

Cox Automotive’s latest AutoFocus insight update reveals a slowly improving new car sector for the rest of 2023, supported by recovering vehicle production

That’s according to Cox Automotive’s baseline forecast, published in its latest AutoFocus insight update. The update reveals a slowly improving sector for the rest of 2023, supported by recovering vehicle production that will more adequately meet customer demand and prevent significant imbalances.

Cox’s forecasts consider a baseline, upside and downside scenario for the new market; the baseline scenario remains the most likely, with steady recovery expected in Q3 and Q4. The scenario includes a belief that the UK’s projected economic recovery will remain on track and that the entry of new OEMs into the UK market will have a limited impact on pricing and volumes for long-standing OEMs. That will result in a slower-than-desired adoption rate by consumers and businesses alike.

Philip Nothard, insight and strategy director at Cox Automotive, said: “The new car market is going through arguably its most significant change in decades, an evolution driven by electrification, new players entering the arena and changes to how new cars are sold.

“This sector has faced numerous challenges over the past three years and the shoots of recovery that it showed at the beginning of the year will, we think, characterise what remains of these 12 months.”

Nothard added that the evident transformation of the sector involves a re-evaluation of how to proceed in both the physical and digital realms and how to best implement an omnichannel approach.

The report also explores the outlook for franchised dealers, outlining evidence for accelerated consolidation, especially in a market that needs to attract investors and adapt to changing OEM attitudes that place profitability above sheer volume, according to Cox Automotive.

“The industry is aiming to reconcile agency strategies, historic franchise agreements and a hybrid approach that blends the two in an increasingly divided and diverse world,” Nothard said. “These complexities unfold amid what can only be described as a critical juncture in the journey toward an electrified, net-zero future.”

The report also stresses the need for evolving sales strategies to meet the demands of an evolving market, with electrification serving as a driving force.

“Success will hinge on the ability of stakeholders to nimbly traverse these complexities. They must forge new partnerships and embrace sustainable practices that will hopefully lead them into a thriving net zero era.”

To access the latest issue of Cox Automotive’s AutoFocus, click here.