Positive signs of vehicle supply, steadily improving inflation, and the retail performance of electric vehicles signal optimism for the near future, according to Cox Automotive Europe’s latest industry analysis, AutoFocus, released this week.
The quarterly report is based on study of data and opinion from across the automotive sector and reveals the company’s new and used market forecasts for 2023, featuring an in depth analysis of Q1 and Q2.
“The end of 2022 saw an improvement in new vehicle supply,” says Philip Nothard, insight and strategy director at Cox Automotive. “Early signs indicate this will continue to be the case, with supply outstripping many previous forecasts. We should be painting a more positive picture for the year ahead than many may think possible.”
“It’s a similar picture for the economy,” Nothard notes. “While current conditions are far from ideal, inflation levels are forecast to improve throughout the year, remaining ahead of Bank of England targets. This will strengthen consumer and business confidence, giving both the new and used car markets a much needed boost. So we could be heading out of the doldrums at long last.”
Nothard adds that more new cars are rolling off manufacturer production lines, which would help reduce market volatility, even if the cost of living crisis was affecting consumer confidence.
He also points to OEM tactical registration activity happening at dealerships, and open lines of communication once more between manufacturers and rental companies, which he said were both signs of a “normal” new car market.
Nothard believes 2023 could be a defining year for electric vehicles, commenting, “The electrification of our vehicle parc is continuing at pace, but are we ready? Last year saw the largest percentage of battery electric and plug-in hybrid vehicles sold to date and the biggest year-on-year growth in registrations.”
“There’s no doubt consumer behaviors are shifting, and manufacturer and fleet operator strategies are following suit. This has led to many popular models being no longer available and leaving this European market segment ripe for new Chinese brands to gain a footing. So there’s a lot to be optimistic and excited about.”
“In the past, consumers have been open-minded about adopting new operators as they've entered the market, so there's no reason to believe the same won't be true of Chinese car brands.
“The timing couldn't be better for them as established OEMs step away from affordable but ultimately unprofitable legacy models. Ford’s decision to cease production of its long-term best-selling Fiesta model may be the highest profile casualty but it’s just one example. This will leave a void to fill as people still need small, cheaper cars.”
AutoFocus also presents insights by Mike Allen from financial services group Zeus Capital, Owen Edwards from accounting firm Grant Thornton, Steve Young from research organization ICDP, and Tom Callow at renewable energy specialist myenergi.
The current issue of AutoFocus can be downloaded from the Cox Automotive website.
Cox Automotive Europe is an operating division of Cox Automotive International and part of Cox Automotive, representing Europe, Australia & New Zealand, Brazil, and emerging markets in China and India. The company’s European product brands include Manheim, Manheim Express, Dealer Auction, RMS Automotive, Movex, NextGear Capital, Modix, Codeweavers, eVA Valuations & Appraisals, FleetMaster, Spiers New Technologies, and money4yourmotors.com.