2025 new car forecast reflecting local economic pressures and global supply chain constraints

I am pleased to share that Cox Automotive Europe has published the third edition of its IQ (Insight Quarterly), Q4/2024, sharing data and industry commentary on the changing dynamics of the European automotive industry. Within this, I've set our forecasts for new car registrations in 2025, noting potential growth in the market, tempered by local economic pressures and global supply chain constraints.

Cox Automotive reveals 2025 new car forecast reflecting local economic pressures and global supply chain constraints. 

• Cox Automotive's new car forecast predicts 2,043,115 new car registrations during 2025, a 3.6% uplift on 2024  
• The year-on-year increase has failed to overcome the impact of recent years, as the total volume is still 11.6% below the 2001-2019 average.  
• Local economic pressures and global supply chain constraints continue to impact new car registrations.    

 Cox Automotive’s 2025 baseline forecast predicts nearly two million new car registrations, marking a slight 3.6% increase over 2024. However, volumes remain 11.6% below the average for 2001-2019 – an indication of sector challenges still to come. 

Local economic pressures and global supply chain disruptions continue to impact the UK market’s post-pandemic recovery, straining both manufacturers and consumers as they navigate an evolving automotive landscape. 

The latest projections in Cox Automotive’s Insight Quarterly (IQ) indicate the transition to new energy vehicles (NEVs) – including strategic adjustments by legacy manufacturers and competition from new entrants – could result in fewer choices in vehicle makes and models if some OEMs reduce their UK exposure. 

Cox Automotive’s Insight Director, Philip Nothard, comments: “Despite the strain of high household costs driven by persistent inflation and elevated interest rates, a gradual boost in consumer confidence is on the horizon. This optimism is likely to sustain demand in the new vehicle market, with fleet sales playing a central role.”  

New car registration forecast 2024 - 2027

He continues: “The evolving landscape is prompting many OEMs to reassess the agency sales model, often delaying its full implementation as they seek greater financial transparency. With the shift from traditional ‘push’ to demand-driven ‘pull sales, consumers may experience reduced vehicle availability, reflecting OEMs’ focus on aligning supply with actual demand.” 

The UK’s reliance on global manufacturers remains significant, with imports comprising 90% of new car registrations. In 2023, this translated to a record 1.72 million imported units, up 18.6% from 2022, a trend likely to continue through 2025 and beyond. These import levels underscore how global OEM decisions directly influence the availability of vehicles for UK consumers and fleet operators. 

Nothard adds: “Although global vehicle production remains high, a growing misalignment between production rates and the UK’s ambitious ZEV targets raises questions about OEMs’ commitment to meeting UK mandates, especially with rising pressure to increase EV sales. The industry faces complex trade-offs as it reduces ICE production to meet ZEV goals, setting up 2025 and beyond as a period of significant market transformation.” 

Looking ahead, Cox Automotive predicts a tipping point in 2027 as the market further shifts away from internal combustion engines. Diesel and mild hybrid electric vehicle (MHEV) registrations are projected to drop from 6% in 2024 to just 3% by 2027, a 56.8% decline. Petrol/MHEV registrations are expected to decrease from 51% to 35%. Conversely, battery electric vehicle (BEV) registrations are projected to rise from 21% to 34%, a substantial 165.4% increase, with plug-in hybrid electric vehicle (PHEV) and hybrid electric vehicle (HEV) registrations increasing from 22% to 28%. 

Nothard concludes: “By 2027, we expect to see a pivotal shift in the UK automotive landscape as the industry moves decisively away from internal combustion engines. 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. These changes underscore the need for adaptable strategies as both manufacturers and consumers embrace a new era in mobility.” 

Cox Automotive’s Insight Quarterly (Q4 2024) is available

here.

Featuring commentary from contributors at ICDP, Regit, Interpath, Grant Thornton and Codeweavers, this quarter’s edition also provides new and used car forecasts for 2025 and beyond.