UK car transactions to top 10 million for fifth year in a row

UK car transactions to top 10 million for fifth year in a row

New and used car transactions

More than 10 million new and used cars will be sold in the UK in 2019 for the fifth year in a row, according to the latest data from Cox Automotive.

The figure represents a -2.1% fall in transactions YoY as the market returns to a sustainable level following the 2017 peak.

Philip Nothard, Customer Insight and Strategy Director for Cox Automotive UK, said: “Our 2019 forecasts have proved extremely accurate, and are within less than 1% of the SMMT figures released so far.”

“While 10 million new and used car transactions represents a YoY decline, it’s a fantastic achievement considering the headwinds that have buffeted the industry throughout the year.”

Cox Automotive has also published its forecast for Q1 2020, predicting 692,000 new car registrations (down -1.3% YoY) and 1.96 million used car transactions (down -2.7% YoY) across the first three months of 2020.

Nothard commented: “As we move into 2020, we know that CAFE legislation will begin to affect the market when it comes into force in January. Unlike WLTP, it’s unlikely to have a dramatic effect on new car availability and may actually improve the supply of some ‘greener’ vehicles as OEMs look to reduce their overall fleet emissions.”

“That said, the introduction of subsequent sets of green legislation has forced OEMs to invest heavily in developing greener technology to avoid fines, and they may look to off-set this with savings from distribution and dealer partnerships, squeezing profit margins for UK businesses.”

While economic and political factors will affect the UK car market, Cox Automotive’s forecasts also reflect wider trends within the automotive industry.

Both the new and used market reached a peak in 2016, and transactions are now returning to more sustainable levels.

Nothard concluded: “We’re also seeing longer-term changes in the industry that will affect the highly competitive dealer landscape. Margin pressures, strong appetite for stock, the success of car supermarkets, and increased FCA regulation are all putting pressure on small independent dealers.”

“In addition, the development of a sales approach that blends online and physical will be a challenge to some and an opportunity for others.”

“With this in mind it’s likely we’ll continue to see consolidation in the dealer market during 2020, but what will emerge will be stronger, more profitable businesses that are ready to offer a flexible service to their customers.”

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