New market could experience pressure surpassing economic crash and pandemic

Pressure in the new car market during Q4 will surpass the pressure experienced during the economic crash of 2008 and the pandemic in 2020, according to Cox Automotive.

Cox Automotive’s revised 2024 new car forecast predicts 2,018,446 registrations will be achieved by the end of the year, a marginal 2.07% decrease on its previous forecast.

Insight Director Philip Nothard, said: “The net result is that registrations are tracking ahead of our baseline forecast at this point, and we remain confident that our forecast of two million registrations for the full year is realistic.

“How this number will be achieved is a cause for concern. Several prominent manufacturers have made it clear that non-compliance with the ZEV mandate is not an option and that they have no intention of paying penalties.

“But with EV sales falling well short of where they need to be, this leaves them with just a handful of options if they are to meet this pledge.

“They will either prioritise pushing EV stock into the market through aggressive fleet and retail price strategies, or restrict the availability of ICE and PHEV derivatives to force EV sales. Some may do both.”

Manufacturer and dealer profitability, consumer choice and residual values will be impacted.

Financial pressure, Increased competition and the responsibility to fast-track the switch to electric will impact manufacturers.

Nothard added: “Dealers will inevitably take on some of this burden, as will fleets and private buyers, in the form of unpredictable residual values when these heavily discounted EVs start to flood the used market in 12-36 months’ time.

“The year is progressing at pace, and with no government concession on the ZEV timetable or any support mechanisms in sight, the risk of significant challenge, unlike anything seen in over a decade, in Q4 is genuine.”