Auto Trader predicts 22% increase in new car sales in 2023

New car sales expected to increase 22% year-on-year next year.

This is the forecast from Auto Trader. It said that while the “dramatic recent shortfall” in new car stock will impede used car transactions in 2023, it believes sustained levels of consumer demand will limit the potential impact, with used car sales expected to be broadly in line with 2022.

Auto Trader’s forecast analysis predicts circa 1.9 million new car registrations in 2023, which marks an 18% fall on pre-pandemic 2019 levels (and below the mid-term average of 2.4 million cars), but a positive 22% increase on the 1.6 million registrations anticipated by the close of this year, as well as the two years previous.

However, this target is largely dependent on levels of supply into the market, which has been constrained for the last three years by global shortages of vital parts.

New car supply will also be a major influence in the used car market. To date, an estimated 2.5 million new car registrations have been ‘lost’ since the start of the pandemic, which due to typical three-year finance cycles, will begin to significantly reduce the availability of younger second-hand stock from next year.

Whilst this will impede transactions, Auto Trader predicts the market will be in the range of 6.8 – 7.0 million used car transactions, similar to the expectations for 2022.

Auto Trader’s Brand Director, Marc Palmer, said: “With so many different variables at play, predicting the direction of the market is never an easy task, and not one we take lightly. But as ever, we are led by the data. As we have found this year, the market performance has been dictated by supply, not demand. We have consistently seen on our marketplace, where there is stock there is strong demand, whether that be for new or used cars, a trend we fully anticipate continuing into 2023. And whilst the year ahead will be a demanding one, based on what we’re tracking across the market, we believe it is in a far stronger position than previous periods of economic turbulence.”