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UK’s automotive sector ‘faces weak recovery’ in 2023

960 640 Stuart O'Brien

Following the release of data by the Society of Motor Manufacturers and Traders (SMMT), showing that the UK new car market was down 2% at 1.61 million sales in 2022, a leading analyst predicts recovery will be slow.

The UK new car market recorded its fifth consecutive month of growth in December, with an 18.3% increase to reach 128,462 new registrations, according to the SMMT daya.

That second half year performance was not enough, however, to offset the declines recorded during the first half of 2022. Despite underlying demand, pandemic-related global parts shortages saw overall registrations for the year fall -2.0% to 1.61 million, around 700,000 units below pre-Covid levels.

David Leggett, Automotive Analyst at GlobalData, said: “Major demand headwinds are building for UK households and businesses and there is a recession looming.

“GlobalData forecasts that the UK car market in 2023 will reach around 1.8 million.

“At that level, 2023’s UK new car market would still be around a quarter down on 2019’s 2.3 million sales.

“While there are signs of an easing of parts shortages that have constrained sales over the past two years, fragile supply chains and cost pressures will continue to be extremely challenging this year.

“Underlying new car demand is also going to be weak in 2023.

“I’m afraid a year of weak recovery is in prospect alongside ongoing uncertainties that deter investment in the sector.”