New car demand is expected to weaken over the next two years according to a new white paper published today which predicts sales of 1.95 million in 2011 and 2.15 million in 2012.
The prediction comes from Les Glassock of Les Glassock & Associates has looked at the main economic factors driving the UK new car market – GDP, interest rates, exchange rates, unemployment and gives a forecast for the overall market volumes in 2011 and 2012, as well as the outlook for each major segment: budget, mainstream and premium.
Glassock believes mainstream brands will continue to be squeezed from the bottom by budget brands and from the top by premium offers.
He believes the budget segment will continue to be dominated by Hyundai, Kia, and Škoda in 2011.
Glassock said: “The premium segment will continue to be dominated by Audi and BMW, although Mercedes-Benz should continue to strengthen. The outlook remains uncertain for Jaguar and Saab.
“The primary market driver, GDP, will be lower than trend in 2011, 2012 and again in 2013 - in the range of 1.5% - 2.0%. In 2014 and 2005 growth should move ahead strongly - above 3%, coinciding with a 2005 election.
“As a result, the retail market is expected to weaken next year, although fleet will take up some of the slack.”