New and used car sales may never return to pre-pandemic levels because of current headwinds battering the automotive market.
That’s the view of Cox Automotive, which has downgraded its new car production forecast, citing a 31m new car unit shortfall globally.
The company says that even without the Ukraine crisis, it was set to lower its total new car production prediction, as supply has simply not picked up, despite reports of carmakers fulfilling leasing orders and making tactical registrations.
Cox’s new prediction stands at 436,286 at the end of 2022’s second quarter, which is down by just under 10 per cent year on year.
The third quarter is predicted to end on 483,433 registrations – a 22 per cent increase year on year.
Moreover, Cox Automotive expects the baseline scenario for the full year to end on 1.65m registrations – a 0.2 per cent increase year on year, but a 13.8 per cent downgrade.
The company also offered two other predictions – an upside scenario of 1.83m units representing a 14.1 per cent downgrade, and a downside prediction of 1.51m units which is an 11.3 per cent downgrade.
Cox Automotive’s insight and strategy director, Philip Nothard, said: ‘It is looking increasingly likely that the pre-pandemic automotive market we all knew may never return as the sector continues to be hit by headwinds.
‘Whether it is a growing number of manufacturers switching to the agency model or ongoing supply chain disruption, the UK’s automotive sector looks set for short-to-medium-term volatility and may well emerge from this looking completely different to pre-pandemic levels.’
Nothard added that hopes of a smooth and progressive recovery in new car sales thanks to predicted improvements in the supply of semiconductors and raw materials were now dashed because of the Ukraine crisis.
He said: ‘Supply headaches also persist from the long-awaited fulfilment of orders made 12 or even 18 months ago.
‘However, there are also reports of this year’s order books already being full, so it’s clear the backlog of orders will only grow, and new orders won’t turn into actual registrations until at least H2 2022 or even into 2023.’
In addition, Nothard pointed out how reports of some cars rolling off production lines and missing specifications such as touchscreens, heated seats and sat nav devices means new car buyers are often ‘compromising on what options they initially wanted to order on a vehicle’.