The UK car sector has been passing through a difficult period since sales of new and used vehicles peaked in 2016. A combination of a slowdown in the UK economy, a natural softening of recent growth and more recently the arrival of COVID-19 have all seriously impacted the sector.
Chris Hadley Consulting’s most recent research in early 2021 illustrates these difficulties. Lockdowns and a loss of consumer confidence during 2020 led to a collapse in new car sales. While the used sector was able to benefit to some extent by offering low price it too also suffered a decline in buyer activity.
Various sources of information were accessed to undertake this analysis including government and trade reports. Research also made use of consumer interviews to provide a greater understanding of where the market may be heading. While the short term is expected to continue to be difficult for the market, medium term prospects remain good especially for hybrid and electric. Yet with a UK that is set to phase out new cars based on fossil fuels from 2030 the market is set for change. Growing restrictions on motor vehicles in urban areas and competition from other ways of accessing a car are both set to increase moving the market increasingly upmarket for those that are purchasers.