The Parc of petrol vehicles in United Kingdom attained a value of 20,319,062.10 Units in 2020
The indicator recorded a historical decline (CAGR) of 2.72% between 2017 to 2020, and is expected to decline by...
GlobalData projects the indicator to decline at a CAGR of...
Automotive industry in UK
The UK new cars market suffered value and volume declines each year until 2021, when the market recovered and achieved very strong growth. Strong growth is expected once again in 2022, with moderate growth rates expected over the remainder of the forecast period.
Consumer and business confidence was hit in mid-2016 by the uncertainty caused by Brexit, slowing demand. The economic growth was slowed down in 2018 due to the ongoing chaos over Brexit. This negative condition took full effect in recent years as consumers put off new car purchases in the face of sluggish economic growth and uncertainty, while demand has been saturated by the sales boom of previous years. The depreciation of the British pound also added to the market’s downward trend, increasing the cost of imported cars.
The COVID-19 pandemic had a significant impact on the automotive industry in 2020, which had a knock-on effect on the new cars market. Temporary shutdowns at manufacturing plants amid labour shortages and severe disruption in the supply chain, including a shortage of semiconductors, led to production declines. Meanwhile, consumer and business confidence remained depressed since its slump in the advent of the pandemic, leading to a decline in demand. In 2020, the economy contracted due to the economic crisis caused by the pandemic.
Despite the poor performance of the new car market overall, the hybrid and electric segment of the market has performed well in recent years. In recent years, the UK electric and hybrid car market has grown significantly due to consumers’ desire to be green. It has also been largely driven by government subsidies and preferential tax treatment for hybrid and electric cars. In the UK, the share of hybrid and electric car sales increased in 2020.
The UK new cars market is expected to follow a strong growth trajectory in value and volume terms in 2021 and 2022. Pent-up demand will drive growth, while the improving macroeconomic environment given that the pandemic is set to be coming to an end will support spending over the coming years. According to GlobalData, the UK economy grew in 2021. Furthermore, the sales of hybrid and electric cars will continue to grow strongly over the coming years given that further cost reductions in battery technologies will allow purchase prices to converge with those of internal combustion engine cars.
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