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The UK new car market is set to see growth in 2023, according to data firm Cox Automotive.
It has released its latest sales forecasts for the year, with a baseline prediction of 1,711,447 - up from the 1.68 million it was forecasting for the year last November.
The new forecast would also represent a 6% increase on the market's performance in 2022 - although it would still be 26% down on pre-pandemic levels, which Cox has warned may never be seen again.
It said a lack of infrastructure to support more EV purchases, discussions surrounding the agency model for car sales, and the rise of Chinese brands in the UK and Europe could all change the shape of the sector for years to come.
However, it also said it noted the current positive position of the new car sector, having already navigated several significant headwinds.
Cox insight and strategy director Philip Nothard said: "Last year was challenging for the new car sector, yet we began 2023 with a welcome, albeit small, feeling of positivity.
"There were signs in the closing months of last year that manufacturers were increasing supply levels, reducing market volatility, with added reports of tactical registration activity and increased activity in the leasing sector; we have signs of a 'normal' car market."
Cox has also issued a best-case scenario prediction of 1,904,024 registrations, and a worst-case scenario prediction of 1,614,352.
Among the factors feeding into Cox's baseline market projection is a returning appetite within fleet and leasing companies following market incentives to aid new vehicle purchases.
On the subject of EVs, Nothard said: "As we edge closer to the Zero Emission Vehicle Mandate regulation, more needs to be done for EVs to truly become the dominant mode of transport.
"Significant investment is still needed in the charging infrastructure to support a growing EV parc. In addition, there are still barriers to entry for many people, with the cost of EVs being higher than their petrol/diesel counterparts."
Turning to Chinese manufacturers, he added: "The timing couldn't be better for Chinese manufacturers as established OEMs step away from affordable but ultimately unprofitable legacy models. This has left a void to fill as people still need small, cheaper cars."
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