Cox Automotive 2019 forecasts make the grade

New car & van forecasts released by Cox Automotive Jun 2019 prove accurate

The release of the official new car and LCV registration figures by the Society of Motor Manufacturers and Traders (SMMT) earlier this month (January 2020) has provided a boost for the Cox Automotive Insights team, validating the forecasts it produced a whole six months earlier. In a year of exceptional turbulence in both the new and used markets, the relative accuracy of the forecasts is further evidence of the quality of data and insight available to the business and its partners.

The Cox Automotive Report (June 2019) predicted 2,298,032 new car registrations in 2019, a forecast fall of -2.98% Year on Year (YoY) from the 2018 figures. According to SMMT data, the year closed at 2,311,140 registrations, down -2.4% on the previous year – a difference of just 13,108 vehicles or 0.57% from forecast.

Customer Strategy & Insight Director at Cox Automotive Philip Nothard suggests the relative improvement against forecast is, in part, due to a surge in the latter part of the year, as the retail sector saw an increase in pre-registration activity. However, he argues current levels of pre-reg activity are not sustainable, stating: “Many retailers expect further volume declines in 2020, with 76% warning pre-reg levels are too high to be maintained.”

One in five dealers surveyed by Cox Automotive as part of its regular trend tracking described 2019 as how they had expected. However, three in five (58%) experienced a worse year than they had anticipated.

Nothard adds: “The past 12 months have seen dealers face significant pressure on margin, amid a climate of political and economic uncertainty. While the road ahead is not yet clear, the impact of a majority government should hopefully mean reduced uncertainty, increased consumer confidence and the opportunity for automotive retail to invest.

“That said, the first quarter of 2020 is likely to see a further fall in registrations and we expect dealers and manufacturers to spread their risk, with renewed focus on aftersales, used vehicles and product expansion around the Car as a Service (CaaS).”

In the new van sector, the Cox Automotive Insights Report medium forecast was 360,000 registrations for 2019, up +0.8% on the previous year; while the upper forecast was 364,000 registrations. SMMT data closed the year at 365,778 – a difference of just 5,778 vehicles or 1.6% from the medium prediction and just 1,778 vehicles or 0.49% from the upper projection.

James Davis, Customer Strategy & Insight Director at Cox Automotive, comments: “We ended 2019 with the UK’s third best new van registration result, testament to the role of the LCV as backbone to business and the economy.

“The flurry of Euro 5 replacements from the leasing sector may settle into a steady pattern, while most businesses and owner-operators will want to see how the Clean Air Zone (CAZ) roll-outs impact before making big changes.”

Davis continues: “Although there will inevitably be some changes, we expect 2020 to be a broadly similar year to 2019 in terms of volumes and activity, perhaps even slightly stronger due to replacement of non-compliant extended vans. This contrasts with the forecast of the SMMT in Dec 2019, which predicts the LCV market at the end of 2020 will be down -5.2%.”

The Cox Automotive Insights Report also forecast performance for the used car and van market in 2019. Results from the SMMT are due in mid-February 2020.

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