KPMG, the financial advisory business, believes the UK car market could be faced with oversupply if the availability of cheap credit continues next year.
John Leech, KPMG head of automotive, believes the UK car market "is going in the right direction" with UK new car sales predicted to grow in 2014, but at a slower rate than this year.
He said: “The rate of growth depends principally on when the car manufacturers pull back on the cheap credit that is currently pump-priming the market.
“If this cheap credit remains available throughout next year then there is an increasing risk of oversupply of new cars which could raise anxiety regarding a potential shock fall in used car residual values.
“UK car production will grow again for the fifth year running as European car sales start to slowly rise once more. This should also see European car production finally turnaround and grow in 2014 for the first time in seven years.”
Leech also believes consumer enthusiasm will increase for electric cars in 2014 with the BMW i3, after sales failed to ignite this year.
Forecasting developments in driverless cars, Leech said: “New self-driving features will be deployed in executive cars such as ‘traffic-jam assist’ which will see cars driving themselves in low speed traffic jams.
“The focus on innovation by the UK government will also help the development of driverless and electric cars. Plans to test driverless cars in the UK by global car manufacturers will push the UK as a player in driverless car technology.”