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Cox Automotive has announced a downward revision to its UK new car market forecast for 2023.
The data firm said its baseline forecast for next year was now for 1.68 million registrations to occur next year, 10% fewer than its previous forecast.
This would still represent a 9.5% year-on-year increase, however it would be down by 27.1% compared with the 2000-2019 average.
In addition, Cox said its best-case scenario was now 1.77 million registrations - a 15% downgrade - while its worst-case scenario was now 1.55 million registrations - a 7% downgrade.
Among the factors affecting the car industry, Cox said, was the continued impact of the Covid-19 pandemic, with raw material supply shortages and rising prices continuing to hit production, affecting vehicle production capacity and reducing the potential margins manufacturers can make.
Cox Automotive insight and strategy director Philip Nothard noted there had been 31 million fewer cars produced in the two years since global lockdowns were introduced than in the same period before.
He said: "Considering the challenges that still exist today around global production in the manufacturing space, this is set to rise to closer to 40 million over three years, if not more.
"It was previously predicted - or hoped - that the production of new vehicles would return to normality by the end of 2022. But unfortunately, many manufacturers indicate this won't be the case until at least the second or third quarter of 2023.
"This a worrying thought, but I should caveat that supply has improved marginally this year, particularly for specific makes and models, and that manufacturers continue to find new ways to source the vital materials they need to drive supply up."
In addition, according to Cox, which has published the insights in its quarterly AutoFocus update, the industry is being affected by the war in Ukraine, due to its effects on supply chains and the global economy, driving inflation and increasing costs, which are being passed on to customers.
Also noted by Cox is the emergence of challenger brands from China.
Nothard said: "Chinese brands continue to gain a strong foothold in the UK, and it's only a matter of time before they become a significant presence in terms of sales. China is already the world's largest body of the electric vehicle market, with over 1.3 million units sold annually, representing 40% of sales worldwide.
"Europe, of course, is slowly moving towards a greener future. Still, for this, we will need more electric vehicle-centric manufacturers providing the clean cars legislation, and consumer demand necessitates - perhaps Chinese brands present an additional solution."
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