Cox Automotive predicts modest growth for 2025 new car registrations, but challenges remain

New car registrations projected to reach 2,043,115 in 2025, a 3.6% rise from 2024, but still significantly below pre-pandemic levels.
Local economic headwinds and global supply chain issues continue to hamper the sector’s recovery.

COX AUTOMOTIVE’S latest forecast anticipates a modest 3.6% increase in new car registrations for 2025, reaching 2,043,115 units. While this marks a year-on-year improvement, the projected figures fall significantly short of the 2001-2019 average, highlighting the ongoing challenges facing the UK car market.

The lingering effects of local economic pressures, including persistent inflation and high interest rates, coupled with global supply chain disruptions, are hindering the market’s post-pandemic recovery. Both consumers and manufacturers are grappling with these challenges as they navigate an evolving automotive landscape.

Shifting sands: electric transition and OEM strategies

The ongoing transition to new electrified vehicles is reshaping the market, with legacy manufacturers adapting their strategies and new entrants vying for market share. Cox Automotive suggests this shift could lead to a reduction in vehicle makes and models available to UK consumers, as some OEMs may reassess their presence in the market.

Philip Nothard, Insight Director at Cox Automotive, notes that despite the economic pressures on households, “a gradual boost in consumer confidence is on the horizon.” This, combined with strong fleet sales, is expected to support demand in the new car market.

However, Nothard also points to a shift in OEM strategies, with many reassessing the agency sales model and delaying its full implementation. This move towards a demand-driven “pull” sales approach may result in reduced vehicle availability as OEMs focus on aligning supply with actual demand.

Import reliance and ZEV targets

The UK’s heavy reliance on imported vehicles continues, with 90% of new car registrations originating from overseas. This dependence underscores the influence of global OEM decisions on vehicle availability for UK consumers and fleet operators.

While global vehicle production remains high, Cox Automotive highlights a growing misalignment between production rates and the UK’s ambitious zero-emission vehicle (ZEV) targets. This raises concerns about the commitment of some OEMs to meeting these mandates, particularly in light of the increasing pressure to boost EV sales.

Looking ahead: 2027 tipping point

Cox Automotive predicts a significant turning point in 2027, with the market decisively shifting away from internal combustion engines. Diesel and mild hybrid registrations are projected to plummet, while battery electric vehicles are expected to claim a larger share of the market.

“By 2027, we expect to see a pivotal shift in the UK automotive landscape. With diesel and petrol vehicle shares set to decline sharply, and battery electric vehicles projected to make up over a third of new registrations, the market is clearly accelerating toward an electrified future.”

Philip Nothard, Insight Director at Cox Automotive Tweet

For a deeper dive into these trends and further insights, download Cox Automotive’s Insight Quarterly (Q4 2024). This quarter’s edition features expert commentary from ICDP, Regit, Interpath, Grant Thornton and Codeweavers and provides comprehensive new and used car forecasts for 2025 and beyond.