The global car market may never return to its pre-pandemic state, due to a transformed landscape and ongoing obstacles…
Car Market may not Recover
Cox Automotive believes that the global car market may never recover from the coronavirus pandemic; having downgraded its 2022 new car forecast for the UK. In particular, it’s cited a 31-million unit decline in reaching its conclusion. The firm believes 2022 will end on just 1.65 million registrations. This is up 0.2% year-on-year, but represents a 13.8% downgrade on its previous forecast.
Initially, hopes were raised by the improving supply of semiconductors and other raw materials. Now, however, the Russian invasion of Ukraine has further complicated the supply-chain and the car market as a result. All of this could spell new, and lasting, realities for the industry – which businesses need to properly prepare for.
Hit by Headwinds
Philip Nothard, insight and strategy director at Cox Automotive, has stated that the firm’s forecasts would have needed to revised regardless of the war in Ukraine. 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″.
He continued, “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”.
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