New car registrations in the UK are expected to reach almost 2.2 million (2,193,547) units in 2026 – an 8.6% year-on-year increase – according to Cox Automotive’s latest new car forecast.
However, Cox warns that, despite this year’s growth, volumes would still remain 5.1% below the long-term average recorded between 2000 and 2019.
The positive outlook follows a robust second quarter, during which more than 523,000 new cars were registered in the UK, up 13.3% compared to the same period last year.
Growth has been driven by fleet demand, manufacturer incentives and a rapidly changing competitive landscape.
The UK market's 13.3% growth in June accounted for 61,358 additional vehicles registered. In the same period, 10 of the UK's newest brands registered over 36,000 vehicles, which accounts for 60% of that total growth.
But, while registrations continue to rise, much of the current momentum is being supported by tactical activity rather than a significant strengthening of underlying consumer demand, according to Cox.
Growing competition from new entrants, rising inventory levels, logistics pressures and continued affordability concerns are creating increasingly challenging market conditions.
Philip Nothard, insight director at Cox Automotive Europe, explained: “The UK new car market continues to perform strongly on paper, but the reality is more nuanced.
“Registrations are rising, yet much of that growth remains heavily dependent on incentives, fleet activity and the expansion of new market entrants rather than organic consumer demand.
“Competition across the industry is now at unprecedented levels. New brands are reshaping buyer expectations around pricing and value, while challenging established manufacturers to adapt more quickly than ever before.”
Global developments are also shaping conditions in the UK, says Cox. China produced 34.5 million vehicles in 2025, which accounts for 42.6% of total global passenger car production, which stood at 71.3 million, while operating at only around 55% capacity utilisation.
Combined with continued restrictions on access to the US market, this is driving an increased focus on Europe among Chinese manufacturers, intensifying competition and pricing pressure across the region.
At the same time, rising energy and logistics costs continue to impact the sector. Oil prices remain 47% higher and freight rates 41% higher than prior to the Iran conflict, contributing to elevated costs across production and supply chains.
