The used automotive market within the UK will fail to stage any important comeback till subsequent yr, in accordance with the newest forecast by automotive companies supplier Cox Automotive.

Even so, the baseline situation supplied in its newest AutoFocus perception, signifies that the market will by the year-end steadily enhance on the again of a return of shopper and enterprise confidence.

This situation – which the corporate suggests is the almost definitely to emerge – additionally anticipates that any restoration shall be comparatively sluggish, with minimal change in demand or market dynamics. 

Used automotive transactions for the entire of 2023 are pegged at 7,154,047 items, a 4% year-on-year improve, however nonetheless under (-3%) the common pre-pandemic yearly determine with forecasts of 1,866,540 transactions within the third quarter, softening to 1,607,517 by the year-end.

Cox Automotive added that its first-quarter baseline forecast of 1,790,034 achieved an accuracy of 96.8%, intently aligning with the precise determine of 1,847,149, which has supported its confidence in its full yr forecast.

The forecast provides that elements together with world financial situations and energy-related points will proceed to behave as obstacles to total development. Retail pricing will nevertheless stay unaffected by rate of interest rises and pressures on family expenditure and can subsequently assist preserve shopper pricing stability.

Philip Nothard, perception and technique director at Cox Automotive, mentioned the worldwide lack of 42 million new automobiles in manufacturing had completely impacted the longer term composition of the used market.

“Nonetheless, our evaluation factors to a gentle enchancment within the UK sector for this yr, which might be partly attributed to manufacturing cycles shifting again to close normality,” he mentioned.

“It however stays a altering panorama and the impression of provide and demand on valuations within the used sector has turn out to be more and more evident in latest months.”

He added that issues of a “cliff edge” in used automobile values ought to diminish as soon as the financial system stabilises.

Nothard added that the present state of the electrical automobile market poses a possible threat for the used automotive sector, mentioning that whereas 64% of franchised sellers stocked battery electrical automobiles (BEV) as a part of their used automobile stock in 2022, solely 11% of impartial sellers did. 

“This creates uncertainty across the pricing and availability of pre-owned electrical automobiles, which may result in cautionary shopping for behaviour from each retailers and customers,” he mentioned.

“By the tip of 2023, greater than a fifth of 0-1-year-old automobiles within the UK parc is predicted to be a BEV, and this determine is projected to extend to 41% for 1-3-year-old vehicles by 2027. To maintain tempo with this speedy market shift, the sector should prioritise training, knowledge-sharing, and legislative measures to help the possession and stocking of pre-owned electrical automobiles.”

Cox Automotive’s consultants additionally imagine that consolidation and acquisition actions within the wider automobile business will increase transaction numbers within the used sector, making a extra streamlined and environment friendly market.