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A constant state of unpredictability is set to continue in the motor industry, and particularly with regard to used car values, for some time yet, according to Cox Automotive.
The data firm said that following a 2021 which was disrupted by vehicle supply problems, the industry would have to get used to a 'VUCA' trading environment, meaning volatility, uncertainty, complexity, and ambiguity.
It said the effects from conditions seen last year, such as record used car prices, an accelerated shift to digital trading, rising inflation, and rapidly rising EV sales, would continue to be felt, with no quick fix back to normality.
Cox Automotive insight and strategy director Philip Nothard said: "Since the coronavirus pandemic began, the automotive industry has been grappling to navigate the constantly changing headwinds.
"From manufacturers to independent motor dealers, businesses must acclimatise to a new norm. Additionally, the use of digital has disrupted the industry, and so have changing market dynamics.
"What used to be seasonal norms no longer exist as everyone adjusts to a completely new trading climate."
Cox Automotive says demand for vehicles is likely to continue to exceed supply for some time.
Nothard said: "We will see the market softening in time, but there is no tsunami of product on the horizon for two reasons. Firstly, because producers of semiconductors don't expect normal conditions to resume until 2023 and secondly, because the types of vehicles entering the wholesale sector are not the same experienced in pre-pandemic times.
"In the first days of 2022, leaders of businesses will be wondering how to get through another year of unpredictability. The advice of Cox Automotive is to adapt to VUCA and embrace change.
"The expected rise in energy bills will continue to hit disposable incomes, there remains no end in sight to inflation, we will experience further digitisation of retail and digitally assisted sales, changes in the way OEMs retail new and used cars are accelerating, a rise of subscription/mobility products is imminent, and we will continue to shift to EVs as the year 2030 nears."
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