Push or pull? What will the future market look like?
Philip Nothard, Insight and Strategy Director,
Welcome to issue nine of AutoFocus.
Welcome to issue nine of AutoFocus, Cox Automotive’s quarterly insight update.
The good news is out. Following the release of the 2022 production volumes, vehicle supply is on the rise, reaching 85 million new cars and LCVs globally throughout the year, ahead of the 80 million we saw in 2021 and exceeding previous predictions.
Additional vehicles entering the market is something we’ve wanted for three years, having lost nearly 42 million vehicles since the pandemic broke. However, the sudden change in circumstances is causing OEMs to reassess their priorities. If supply outstrips demand, particularly in the current economic climate, then the ‘pull’ market dynamics we’ve been accustomed to could be replaced by the ‘push’ dynamics of old. While supply volumes have been dictated by consumer demand in recent times, could they now be decided by the OEMs, as they once were? In our new market article, we dive into the intricacies surrounding these changing dynamics.
As ever, that’s not the only challenge the industry must tackle. Alongside increasing supply, we have new entrants into the European market from China with big ambitions to increase the number of vehicles they export to us. With new Chinese-brand dealerships beginning to pop up in the UK and Europe, it remains to be seen how consumers will embrace these new makes and models, but one thing for certain is they’re going to become a far more common sight on our roads.
Then there’s the ever-growing shift to electrification of our vehicle parc. There remains a number of challenges in this space alone around consumer adoption and infrastructure, notwithstanding changing legislation around the types of fuels included in the Net Zero deadline and volatile used BEV prices. Nevertheless, EVs are undoubtedly the hot topic of the moment, and we’re delighted to bring you the latest insight on a number of important related topics this issue.
"If supply outstrips demand, particularly in the current economic climate, then the ‘pull’ market dynamics we’ve been accustomed to could be replaced by the ‘push’ dynamics of old. Where supply volumes have been dictated by consumer demand in recent times, could they now be decided by the OEMs, as they once were?"
Philip Nothard, Insight and Strategy Director, Cox Automotive
There is a lot to consider. But, as ever with AutoFocus, we aim to provide you with only the most important data, insight and opinion relating to the topics that impact you most. In addition, we reveal our revised new and used car forecasts for the year ahead, featuring an in-depth analysis of Q2 and Q3.
We’re also delighted to include guest contributions from many leading voices in our industry: Mike Allen (Zeus Capital), Owen Edwards (Grant Thornton), Chris Ashton-Green (Regit), and Steve Young (ICDP).
I hope you find this edition of AutoFocus insightful and that it continues to provide context to the challenges you are facing right now. If there is anything you want to learn more about or see in future issues, then please do not hesitate to contact me, but for now, enjoy.