UK Car Market to Rebound in 2024 Amid Significant Challenges
The UK car market is anticipated to rebound in 2024, reaching levels not seen since before the pandemic. Analysts from Auto Trader predict that approximately 10.2 million new and used car transactions will occur by 2026, mirroring figures from 2019. Since the onset of Covid-19, the automotive sector faced significant challenges, but signs of recovery are now evident.
Market Recovery and Consumer Confidence
Auto Trader emphasizes a steady improvement in the car market since 2022, projecting a complete retail recovery by the end of 2024. The growth primarily stems from a robust used car sector, expected to rise by 3% to 8.2 million sales in 2026. Conversely, the new car market anticipates modest growth of 1%, reaching 2.035 million registrations due to ongoing competition and regulatory hurdles.
- 2026 Projections:
- 10.2 million transactions overall.
- 8.2 million used car sales.
- 2.035 million new car registrations.
Consumer confidence remains strong, with a record 982.3 million visits to the Auto Trader platform over the past year. This number is 14.8 million higher than the previous period. Notably, 91% of car buyers feel at least as confident about affording their next vehicle as they did last year. Additionally, 74% plan to purchase a car within the next six months.
Challenges Ahead for the UK Car Market
Looking towards 2026, Auto Trader identifies several challenges that could affect market dynamics. These include:
- Tightening supply of used cars.
- Advancements in electric vehicle (EV) adoption.
- Intensifying competition from numerous brands.
Almost two million new cars lost during the pandemic are now affecting the used car market, particularly impacting the availability of 3-5 year old vehicles. This has led to a forecast of 1.6 million fewer sales in this category compared to 2019, compounded by a 17% annual decrease in the 5-7 year old vehicle segment.
The Rise of Electric Vehicles
The introduction of the Electric Car Grant may stimulate the EV market, with used electric cars currently outpacing other fuel types in sales. Customer choices are expanding with 72 brands now competing for UK buyers. This number is anticipated to reach 80 by the end of next year, indicating a shift in brand loyalty among consumers.
Future Outlook
Ian Plummer, Auto Trader’s chief commercial officer, notes that while 2026 appears poised for growth, it also signifies a period of structural change and heightened competition. He underscores the importance of agility and the ability to target customers effectively in a fragmented market.
Retailers must adopt proactive measures to optimize both vehicle sourcing and customer retention. Those who focus on these strategies are likely to succeed in the evolving landscape of the UK car market.
