November 22, 2024 – London: The UK automotive market is gearing up for a dynamic 2025, with a renewed push to stimulate new car sales amidst intensifying competition and an evolving consumer landscape. According to Auto Trader’s latest analysis, the market is forecast to achieve a modest 2% growth in new car registrations, reaching an estimated 1.98 million units. While this marks the fourth consecutive year of growth, it remains 14% below pre-pandemic levels, reflecting both market constraints and the shifting dynamics of the automotive industry.
Navigating the New Car Landscape
The anticipated growth in new car sales comes in the wake of strategic “push” efforts by manufacturers, driven by improved stock availability, increased affordability, and rising marketing investments. Discounts on new cars have climbed from 7.4% in 2023 to 9% in October 2024, contributing to a 20% year-on-year surge in visits to Auto Trader’s new car platform.
Yet, the market is far from simple. A record influx of 17 new automotive brands and 81 additional models since 2019 has intensified competition, especially as manufacturers contend with the challenge of meeting Zero Emission Vehicle (ZEV) targets. EV market share is projected to reach 23% in 2025, a shortfall compared to the required 28%, underscoring the urgency for targeted, data-driven marketing to attract buyers in an increasingly crowded field.
While consumer interest in EVs continues to rise, with private registrations climbing modestly, the new car market’s reliance on affordability remains a key factor. The average price of a new car has skyrocketed from £31,000 in 2019 to £43,020 in 2024, straining consumer budgets and further emphasizing the importance of brand differentiation and customer acquisition strategies.
Used Car Market: Resilience Amid Challenges
The used car market is set to experience another year of steady growth, with sales predicted to rise by 1% to 7.70 million units in 2025. This builds on the sector’s resilience during a turbulent economic period, fueled by high consumer demand and robust engagement levels. Auto Trader recorded an impressive 74 million additional visits in 2024, bringing the total to 970.6 million visits over the past year, a testament to the sustained interest in the used car sector.
However, sourcing challenges remain a pressing issue. The aftershocks of the pandemic, which saw 3 million fewer new cars sold, are reshaping the availability of 3-5-year-old vehicles. By the end of 2025, this segment is forecast to decline by 37% compared to 2019, reaching its lowest level on record. This constrained supply will likely bolster prices and intensify competition among buyers and sellers alike.
Shifting Trends in Fuel Types
The market is also undergoing a significant shift in fuel type distribution. 2024 marked the peak of petrol car volumes in the UK, with a gradual decline expected from 2025 as the adoption of EVs accelerates. The number of EVs in the UK car parc is projected to increase by 33% next year, reaching 1.66 million, while petrol stock continues its seven-month downward trend. By 2027, there will be nearly 1 million fewer petrol vehicles on UK roads, signaling the urgency for manufacturers and retailers to solidify their used EV strategies.
Looking Ahead: Opportunities and Challenges
Ian Plummer, Auto Trader’s Commercial Director, reflects on the evolving landscape:
“2025 is set for growth, but the complexities we’ve faced this year will persist and, in some cases, intensify. The influx of new brands, stricter ZEV targets, and fluctuating consumer preferences mean manufacturers and retailers must stay agile. A ‘conquest mindset’—focused on winning new customers—will be crucial, alongside delivering great products, exceptional customer experiences, and strong performance. Auto Trader remains committed to supporting this evolution with our cutting-edge technology, data insights, and investments.”
With strong fundamentals underpinning the used car market and a cautiously optimistic outlook for new car sales, the UK automotive industry enters 2025 poised for change. Brands and retailers must adapt swiftly to this shifting landscape, embracing innovation and strategic agility to thrive in an increasingly competitive market.
