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There are early signs of improvement in the supply of new cars, dealership group Pendragon said as it upgraded its proft forecast after better-than-expected sales.

The company said its sales performance in the last three months of 2022 was ahead of previous expectations, and more than ofset the higher costs it faced.

Sales of new cars during the fourth quarter were 4.6% higher than the previous year, while used car sales were up by 5.2%, Pendragon revealed.

Its sales of second-hand cars were also a notable improvement on the declines reported in the previous quarter, Pendragon stressed.

The automotive industry is a vital part of the UK economy and integral to supporting the delivery of the agendas for levelling up, net zero, advancing global Britain, and the plan for growth. Automotive-related manufacturing contributes £67billion turnover and £14 billion value added to the UK economy, and typically invest around £3 billion each year in R&D.

The new year brings with it annual new car and van registration fgures, and data for 2022 shows that the UK new car market fell -2.0% last year to 1.61 million units. The pandemic continued to cast a long shadow over the global automotive industry and its impact, coupled with geopolitical events, meant that last year was another highly challenging period.

Global semiconductor shortages lingered, constraining deliveries, although tentative signs of easing supply issues were seen in growth in the latter part of the year, even against a deteriorating economic backdrop.

The uplift demonstrates manufacturers’ ongoing investment in new vehicles and determination to prioritise deliveries of the latest zero emission models said Mike Hawes SMMT Chief Executive.

Manufacturers, meanwhile face a Zero Emission Vehicle Mandate regulation in just a year’s time. For this to work, however, for EV uptake to be accelerated and a vibrant new car market re-established, industry must have sufcient time and fexibility to respond. But the consultation – never mind the regulation – is still awaited meaning it will likely be too late for any signifcant adjustments in product or volumes in time for a 2024 start.

The industry begins 2023 poised for recovery, with an outlook targeting new car and van market growth worth some £10 billion this year. However we remain exposed to broader geopolitical and economic events and government must deliver a clear action plan that helps drivers to go electric, builds infrastructure beftting a nation aiming for inclusive electric mobility and puts in place legislative and fscal frameworks that inspire rather than impede.

Whilst market challenges will persist in 2023 we enter the new year with confdence and good momentum.

Best wishes