The UK’s Automotive Market, At a Glance

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The automotive market has experienced significant disruption in recent years, for a variety of reasons. Britain’s departure from the European Single Market is often cited as the main reason for the disruption, with imports and exports becoming more difficult. However, there were other factors that led to a very difficult few years for manufacturers and dealers alike. What is it, and what might happen in the future?

Coronavirus pandemic

The coronavirus pandemic has had an impact on the automotive industry, from manufacturing to consumer habits and demand. Most obviously, stay-at-home orders for all but essential workers brought production to a crawl.

Meanwhile, the adoption of leave or remote work arrangements by most businesses has been a driving factor in the decline in car ownership. Some of this influence persisted even after pandemic restrictions eased, with the popularity of hybrid work transforming many commuting relationships to personal transportation.

Semiconductor Crisis

However, along with the pandemic, other global events have had a profound impact on the automotive industry as a whole. Disruptions to silicon semiconductor production in Taiwan caused shortages around the world, with ripple effects throughout the tech industry. Bespoke integrated circuits are essential for the manufacture of new car ECUs and sensor systems; without a new supply, new car models become more difficult to obtain – leading to an increased demand for used cars.

Indeed, high-end executive models such as used Mercedes have seen a significant increase in interest, offering similar amenities to newer models at a lower overall price. However, the increase in demand for used cars has also fueled the price increases that many people are asking for.

Rising Costs

By the way, rising costs have been a theme in recent months. The cost of living crisis has caused a number of household costs to increase, with direct and indirect consequences for motorists and the automotive sector. Gasoline and diesel costs peak in mid-2022, with the price per liter threatening to exceed £2 in some areas.

Indirectly, the increase in the general cost of living has reduced the household budget significantly. Families with lower purchasing power are less able to pay for the running costs for their cars, both maintenance and insurance. Thus, the number of car ownership continues to decline.


But what is the future of driving in the UK? Electric vehicles remain a promising entrant, as technology continues to evolve and EVs become more affordable for smaller budgets. But in the short term, the outlook is less optimistic. The coming recession foreshadows a difficult year for both businesses and consumers, and one in which many more will survive – including halting larger investments in cars or maintenance.

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