The new car market has entered 2025 with renewed momentum and cautious optimism particularly for electric vehicles and emerging brands despite geopolitical and economic headwinds, according to Cox Automotive’s latest car sales forecasts.
Philip Nothard, insight director at Cox Automotive, believes the industry is adjusting to a “new global production reality” shaped by China’s rapid rise and changing consumer demands.
“Over the last 18 months, we’ve seen a fundamental shift in where and how cars are being built,” said Nothard. “China’s production surge has been nothing short of transformative.”
New data from Cox Automotive shows China’s passenger car output grew by 29% between 2019 and 2024, giving it a commanding 40.6% share of global production. Meanwhile, the EU27 and UK saw their combined output fall by 21%, shedding 5.1% of their share.
“China’s ability to supply its domestic market is staggering,” Nothard added. “Only 3% of its vehicle sales come from imports, compared to nearly 48% in the U.S. That kind of resilience has huge implications for the rest of the world.”
Reflecting wider market caution, the global production forecast for 2024 has been revised down 3% to just over 89 million vehicles. For the UK, that equates to 2.34% of the global total.
UK market shows resilience
Meanwhile, the UK new car market is off to a strong start in 2025, with more than 580,000 registrations in March – the best monthly figure since 2019.
“This is a positive signal,” said Nothard. “The market is recovering — not just in fleet, which continues to dominate, but also among private buyers. That confidence is gradually returning.”
Cox Automotive forecasts 2,084,477 new car registrations in the UK for 2025, a 29.1% increase from -pandemic low in 2022, though still 9.8% down on 2019 levels.
“This rebound hinges on the continued success of new entrants and their ability to build strong relationships with UK dealers,” Nothard noted. “If they keep their current trajectory, passing the two million mark this year is very achievable.”
New brand disruption
Chinese brands continue to make significant inroads into the UK market. BYD, for example, secured a 1.6% market share in Q1 2025 – a 625% year-on-year increase – outperforming several legacy brands.
“We’re seeing disruption on a scale that’s forcing everyone to rethink their strategies,” said Nothard. “BYD’s rise is a wake-up call. With their premium brand Denza on the way, and other marques like Jaecoo and Omoda gaining ground, the game is changing fast.”
“Legacy manufacturers need to move quickly to protect their market share and adapt to a world where new players aren’t just participating – they’re leading.”
According to Nothard, stakeholders must now align more closely with Asia’s growing role in automotive manufacturing and adapt their sourcing, logistics, and product standards accordingly.
“There’s a risk of being left behind if we don’t adjust to this new reality,” he warned. “European supply is becoming more constrained, while Asia is rapidly expanding.”
He also cautioned against chasing volume at the expense of profitability. “We’ve got to protect margins. That means offering real value to consumers, especially as more people transition to electrified vehicles. Expertise, trust, and infrastructure are going to be absolutely critical.”
In a market defined by flux and fragmentation, Nothard believes adaptability will be the key to long-term success.
“The industry has weathered immense disruption over the past decade,” he said. “What matters now is how we respond to the next wave – because it’s already here.”