IQ

Insight

Quarterly

Q4/2024

Welcome to the third edition of Insight Quarterly (IQ) 2024, Cox Automotive’s regular dive into the trends shaping the future of the UK automotive sector.

Within this latest issue, we explore the Cox Automotive new and used car forecasts for 2025, as well as providing some insights into the road ahead.

Although there are glimmers of hope, particularly in the used market, UK automotive has still not recovered from the impact of pandemic-related supply chain constraints. While the market growth should certainly be celebrated, it’s been gradual and is still lagging behind pre-pandemic volumes.

One of the biggest impacts on both the new and used car forecasts is new energy vehicles (NEVs). The market is undergoing a fundamental change in composition and competitiveness, with new entrants gaining market share and traditional OEMs experiencing decline.

We are also seeing the continued effects of tough economic conditions. Although there are some positive signs, such as lowering interest rates and slowing inflation, this is not yet enough to relieve cost-of-living pressures, or significantly boost consumer confidence.

In the new car market, heavy reliance on imports is creating dependency on global decisions. As OEMs decommission internal combustion engine (ICE) production to prioritise NEVs, supply and demand mismatches are emerging.

For used cars, demand for battery electric vehicles (BEVs) is rising, albeit slowly. This is resulting in a split market where used BEVs are becoming increasingly affordable, while in-demand ICE vehicles experience price increases due to dwindling availability.

Alongside Cox Automotive data and insights, IQ also provides a platform for original and insightful commentary from some of our industry connections:

In this edition, we share insights from.

• Owen Edwards, Head of Downstream Automotive at Grant Thornton, asks whether increased vehicle prices are sustainable in light of negative wage growth, while discussing the changing brand mix.
• Lee Swinerd, Director and Head of Automotive at Interpath, highlights the ongoing struggle for Tier 1 suppliers, and how global decisions are creating uncertainty throughout the supply chain.
• Steve Young, Managing Director at ICDP, outlines how dealer acquisitions, consolidation and integration are changing the shape of the European market.
• Chris Green, Founder and CEO at Regit explores consumer survey data which demonstrates market demand for NEVs, but with conditions attached.
• Shaun Harris, Commercial Director at Cox Automotive business Codeweavers, discusses the alignment of digital-first consumer experiences with regulatory protections.

The breadth of topics in this edition of IQ demonstrates the complexity behind the challenges and opportunity in the UK automotive market. The way the world buys, sells, owns and uses vehicles is changing. Exploring the momentum behind the transition is key to strategic decision-making for businesses.

We hope you enjoy our third edition of 2024’s IQ report and find it both valuable and shareable. Please get in touch to tell us what you would like to see in future issues. We look forward to exploring more ideas with you in the next IQ, which will be out in Q1 2025.

New & used sales vs. global production volume

Source: SMMT / OICA / DVLA / Cox Automotive