The UK market will hit 2.04 million car sales in 2025, a 3.6% increase on 2024 but 11.6% less than the 2000-2019 average, a leading industry analyst has forecast.

Cox Automotive described those figures – its baseline prediction – as “an indication of future sector challenges”. It also produced an ‘upside’ 2025 forecast of 2.3m units and a ‘downside’ of 1.74m.

The baseline predictions suggested quarters one and four would be the hardest of 2025, with respective year-on-year drops of 1% to 540,091 units and 2% to 449,616. Quarters two and three were tipped to be the strongest, with increases of 1.1% and 6.9% to 466,464 and 542,485 units.

Cox anticipated a 26% market share for battery-electric vehicles next year, which would leave them 2% short of the ZEV mandate’s current 28% target for 2025. Market share for pure petrols and petrol mild hybrids was projected to be 45%, with plug-in and regular hybrids at 24% and pure diesels and diesel mild hybrids at 5%.

“With inflation and interest rates only slowly receding, household costs remain high, putting a strain on consumer spending,” said Cox insight director Philip Nothard. “Despite these challenges, a gradual lift in consumer confidence is anticipated, with fleet sales continuing to sustain demand.

“Global vehicle production levels remain robust, but there is a growing mismatch between high production rates and the UK's ambitious ZEV targets. This disparity raises questions about OEMs’ commitment to meeting UK mandates, particularly as the ZEV rules pressure manufacturers to increase BEV shares.”

The company also produced basic new car sales forecasts for 2026 and 2027, predicting a rise of 2% for both years to 2.15m and 2.16m units respectively. Its 2024-2027 forecast expects registrations to rise by 23% (equivalent to 1.54m units) compared with 2020-2023.

Over the same period, registrations of pure diesels and diesel mild hybrids were tipped to fall by 57% or 483,383 units and petrol equivalents by 11% or 427,880 units. Plug-in and regular hybrids were expected to increase by 89% or 982,104 units and battery-electric vehicles by 167% or 1,468,400 units.

“The financial implications of this transition for OEMs, dealerships, fleet operators and associated asset holders remain significant but uncertain,” added Nothard. “Many traditional OEMs are reconsidering their regional focus and market mix to enhance profitability, sometimes prioritising regions where they hold greater market share or more favourable margins.

“For the UK, this could mean fewer choices in vehicle makes and models if some OEMs opt to reduce their UK exposure, or minimise the vehicle mix on offer.”