Supply will never be the same again
Millions of lost new car sales as a result of the pandemic and the shift towards electric have forever altered the make-up of cars on the road. Initially impacting the new car market, these dynamics have knock-on implications for the used market and have consequences for the cars sourced, priced and sold by retailers. This page contains our latest analysis on the future of the car parc - examining types of brands, fuel-types and age of cars on the road - to equip you with the tools to navigate the evolving landscape of new and used car supply.
Lost new car sales shaping the car parc
The dynamics within the car parc have been stable over recent decades as new car sales in each year filter into the used car market over time. The pandemic caused an unprecedented drop in the supply of new cars as factories and retailers closed their doors, resulting in a massive drop in the number of new cars registered in the UK. These supply constraints - as well as the shortage of semi-conductors - resulted in 2.4 million “lost” new car sales between 2020 and 2023. These “lost” sales will create supply constraints in different age cohorts as they age. For retailers, the impact will be long-lasting - permanently reshaping the car parc and the type of vehicles seen on forecourts.
The table below tracks how new car supply each year feeds through into the used market. Because of the pandemic, there were only 1.6 million new car sales in 2020, with 1.5 million of those on British roads at the end of that year (registered as up to one year old). These cars feed through different age cohorts over time, reaching the three-to-five-year-old cohort in 2023. The “lost” new car sales between 2020 and 2023 will result in just 3.0 million three-to-five-year-old cars on the road at the end of 2024, with the same volume expected in 2025. That’s 1.8 million fewer than in 2019, highlighting the lasting impact of the pandemic.
The car parc is ageing
These lost sales will impact the market for years to come, creating shortages in different age groups as time goes on. In 2019 there were almost 14 million under-five-year-old cars in the parc. By 2026, there will be just 11 million - a drop of nearly three million cars.
Retailers will have a significantly smaller pool of younger stock to buy from and those specialising in under-five-year-old cars will find it increasingly challenging to fill their forecourts.
Not all brands affected equally
The impact of lost new car sales will not be uniform. Some brands will see the number of their cars on the road decrease by more than 50% whilst the availability of others, particularly newer challenger brands, will increase. For example, there will be more under-five-year-old cars from Volvo on the road in 2026 than 2019, whereas there will be significantly fewer under-five-year-old cars from Ford.
Meanwhile, newer brands such as Tesla and MG have seen rapid increases in the availability of their cars on the road, presenting a new potential opportunity for stock.
The charts below show the expected change in the volume of under-five-year-old cars on the road for each brand in 2024, 2025 and 2026 compared with 2019. Use the filter to see the change of time from the perspective of future years.
Some brands, such as Kia, saw an initial reduction in the number of under-five-year-old cars on the road because of the pandemic, but are recovering well with a growing number of younger cars on the road. Other brands, such as Fiat, saw the pandemic exacerbate already existing supply challenges in their younger age cohorts, meaning it will take longer for the number of under-five-year-old cars on the road to start growing again.
The charts below show the year-on-year change in the number of under-five and five-to-ten-year-old cars on the road for different brands. Use the filter to compare trends between brands.
Returning supply will increasingly be electric
Whilst new car sales are expected to recover from the pandemic, the type of vehicles entering the parc will be very different to before. An increasing number will be battery electric, which will drastically alter the mix of vehicles on the road and on retailer forecourts.
At the end of June 2024, there were over a million EVs on the road, with more than 167,000 entering the parc in 2024 so far. These volumes are only set to rise as manufacturers push new EVs into the market to meet the Zero Emission targets by the end of the decade.
These factors mean the make-up of the UK car parc is set to change dramatically in the coming years.
Different brands are electrifying at different rates - for MG, almost half of their under-five-year-old parc will be electric by 2026. For others, like Mazda, this figure will be much lower.
The chart below shows how supply will be increasingly electric over the coming years - with much of this in the younger cohorts. Nonetheless, older cars will also increasingly electrify over the coming years so it is important to begin adapting to the changes as early as possible.
There are challenges and opportunities for brands - whether they are ahead or behind on the race to electric
There’s significant variation between brands when it comes to the supply of electric cars and the speed at which they are transitioning to EV models. Those brands falling behind in the race to electric are at risk of seeing their share of the parc reduced by those brands transitioning swiftly. We can categorise brands into four categories - each facing unique challenges and opportunities.
Some brands are “off the scale” in terms of their transition to EV and the growth in their new car supply. These brands are Tesla, MG, CUPRA, Polestar and Porsche.
Use the navigation arrows to examine each quadrant - and the brands within it - in more detail.
The steps retailers need to take to stay ahead:
Review your mix by marque, age, and fuel type
What brands, age cohorts and fuel-types do you specialise in?
How will you be impacted by the changing parc?
Will the increasing electrification and changing brand landscape result in disruption to your business?
Use data to identify opportunities
Is now the time to start adjusting your stock mix to insulate your business from future supply challenges?
Our assumptions
As with any future forecast, we’ve had to make some assumptions about what will happen in the new car market over the coming years. We review these assumptions at the beginning of each calendar year.
It is assumed that each brand’s share of total new car sales will remain fixed at the levels seen from January - April 2024 in 2025 and 2026.
It is assumed that each brand’s share of total new electric car sales will remain fixed at the levels seen from January - April 2024 in 2025 and 2026.
Historic data is based on official government statistics on the number of licensed vehicles on the road, as released by the Department for Transport and Driver and Vehicle Licensing Agency.